Market Watch with Tom Waitt

May_23rd_2012.mp3 Bullish/Bearish Sentiment    Investors are at bearish extremes. Media reports of a bankrupt Greece and the possibility of their withdrawal from the Euro, a failed new issue of Facebook and the pending "Fiscal Cliff" capping off concerns as U.S. politicians continue to dig in along party lines. Contrarian Indicators: Bearish Small Investors (Click For Larger Picture) Markets move on emotions, usually FEAR & GREED, but lately it has been desperation, panic, despondency, depression, disgust and doubt all usually covered by the media in daily news reports. Currently bullish sentiment is as low as at any time since the recessions end and the bearish outlook is challenging recent highs. Without confidence, even the simplest accomplishments are beyond ones grasp. With investors at current extremes contrary opinion is important; historically turning points come at these levels. There are many opportunities to make money but it requires action on your part, each stock

May_16th_2012.mp3 Global Money Supply    Uncertainty rules, media moguls seize the opportunity to stress the worst case scenarios; Greece withdrawing from the Euro, falling off a Fiscal Cliff, China slowdown, plunging commodity prices. Global Money Supply (Click For Larger Picture) Despite news reports there is solid growth and earnings coming out of recent data releases in the U.S. Pessimistic attitudes prevail influenced by media sensationalizing the negatives. Confidence is key, market participants have lost trust in financial markets and politicians. If investors can envision and start to believe markets will achieve increased economic activity. Yesterdays game is ending and tomorrows game has started. Money supply is at an all time high with World Governments spending at record levels to stimulate the economy but the multiplier of money had fallen to post war lows. The turn of a dollar had slowed from three times a day to less than once a day and only recently climbed back

May_9th_2012.mp3 Global Unemployment Rates    Europessimism has once again seized Global markets. Austerity measures causing even higher unemployment in southern European nations. Unemployment rates adjusted to U.S. concepts, 20 countires, seasonally adjusted, October 2010 - March 2012 (Click For Larger Picture) Elections in Greece and France have re-focused concerns on the forced contagion of austerity measures. Fear of inflation has lessened with gold falling below $1600. The economy and unemployment have taken center stage. Over the last decade uncertainty and fear has ruled, pundits have caused the markets to climb a wall of worry. The wall of worry continues to build and it provides an excellent backdrop for value investing, opportunities abound, this is a trading environment and requires active management it is paramount to think outside the box and apply risk/reward analysis to your investments. There are many opportunities to make money but it requires action on your part, each

May_2nd_2012.mp3 China Growth    Concerns over a slowdown in Chinese economic growth are misplaced. The growth is amazing and is likely to prevent a Global recession. China GDP (Click For Larger Picture) Chinese GDP is currently $7.3 Trillion while the U.S. GDP level is $15.1 Trillion. Chinese GDP growth is about 8% currently the U.S. is roughly 2%. The real eye opener comes when one considers levels 5 years ago Chinese GDP was $3.28 Trillion and U.S. GDP $13.81 trillion. Chinese GDP has more than doubled increasing at 123% while the U.S. is up 9.3%. With 19.5% of the Worlds population compared to the U.S. at 4.5% it is hard to see any slowdown being of concern whereas the fact of the U.S. losing global leadership will no doubt become a paramount concern to Americans. There are many opportunities to make money but it requires action on your part, each stock selected must show risk/reward of at least 2:1. Make the call - let me provide you with a unique perspective on your investm

April_25th_2012.mp3 Global GDP Forecast    Global Growth is underway everywhere but the Eurozone, which has been hammered by austerity measures. Average Annual Growth Rate GDP Forecast (Click For Larger Picture) Average annual growth rate forecasts are impressive on a Global basis. Eurozone countries are the exception and daily media reports encourage pessimistic attitudes focusing on the woes of Europe. Note the top two highest growth rates; over 8% in China and over 7% in India. China has 19.22% of the Worlds population and India has 17.27% a combined force of 36.49% of human beings growing at an annual rate of over 7%. This is bullish for equities and should fuel growth for North American markets. These events must be analyzed as to how it affects individual stocks that will benefit from this ever changing economy with incredible potential. There are many opportunities to make money but it requires action on your part, each stock selected must show risk/reward of at least

April_18th_2012.mp3 Record Earnings    U.S. equities are strong while Canadian markets can not surpass last year's highs. It is time to diversify at least half your positions south of the border. S&P 500 Earnings (Click For Larger Picture) Despite European woes and political infighting there are pockets of strength in U.S. markets. Indeed earnings of S&P 500 stocks are at an all time record high. Global positioning is changing right before our eyes, the once mighty Eurozone which was a contender for the number 1 spot pushing the U.S. economy out has slipped rapidly and China is now threatening to take out their number 2 position. India is now set to challenge the Eurozone at a pace more rapid than originally thought. Canadian stocks despite high oil prices are lagging U.S. equities. The Canadian TSX is 15% below the highs of 2011 while the U.S. S&P 500 has surpassed 2011 highs and is approaching all time highs set in 2007. When investing it is important to realiz

April_11th_2012.mp3 Taxing Markets    Nothing is certain but Death & Taxes! Once again it's tax time, it could be worse, individual tax rates are 48 % higher in Spain, 40% higher in France. Individual Tax Rates 2008-2012 (Click For Larger Picture) Tax obligations and the financial health of Euro-zone countries continue to weigh on Global Markets despite improving economic news. So far this year U.S. equities have risen 8.8% and pulled back half that gain over the last five days. The Dow Jones Industrial Index surpassed 2011 highs and is set to challenge the all time high of 14,198.10. It does not go straight up the recession ended in 2009, current growth is positive. Recent activity is influenced by earnings season which Alcoa kicked off yesterday with excellent results. Many more companies will report with various outcomes these events must be analyzed as to how it affects individual stocks that will benefit from this ever changing economy There are many opportunities to make money

April_4th_2012.mp3 ADP Employment Report    Global money flows are seeking a safe harbor moving into the U.S. Dollar displacing Gold as a store of value. ADP Employment Report (Click For Larger Picture) The U.S Economy is seen as the safer economy in the World with low interest rates an accommodating Central Bank and improving employment levels. Global participants are buying dollars leaving other currencies including gold now off over $300 from recent highs. Global markets are in disarray, uncertainty and fear rules with global 24 hour a day media reports highlighting the debt crisis in the Europe. Friday's Unemployment report will be released on Good Friday when most investors are away with the major stock markets closed causing many to react today in a defensive manner. Dollars when they are recycled back to the U.S. for the most part have to be supplied by foreign central banks from the sale of their holdings of U.S. Treasury Securities. This means interest rates will ulti

March_28th_2012.mp3 Credit Crunch    O.K. the markets are acting well U.S. stocks are up over 12% so far in 2012; Canadian equities are up 5.4%. The years of uncertainty and fear and constant media reports of negative breaking news are fading. But what the heck happened? U.S. Total Credit Market Debt & Sector Share Breakdown (Click For Larger Picture) Stocks are in recovery mode and despite low volume and near non-existent retail demand U.S. equities are on course to challenge all time highs. But what caused the turmoil over the last 4 years and has it gone away? The U.S. Total Credit Market Debt has built up to 1930's levels and brought our capitalist society to its knees. This shows the total debts as a percentage of GDP. The differences in the debt 's composition from the 1930's to today are striking, with households, not corporates, being the problem credits. Beginning in the 1980's total debt began to expand dramatically until Total Credit Market Debt peaked at 385.7

March_21st_2012.mp3 Times a Changin    Interest Rates are starting to rise; Bonds which performed well in 2011 have lost principal value over the last 6 months. 10 Year T-Note (Click For Larger Picture) Ten year U.S. treasuries performed well in 2011 rising 15% in principal value despite falling coupon returns of less than 2%. Recent moves have taken coupon returns to 2.4% in the last 6 months eroding 5% of bond holders principal. Normal 10 year interest rates historically are 7%; if rates normalize capital erosion could be a staggering 33% decline. Bonds are risky at current levels. Seniors and savers would welcome a 7% return but would hurt current 10 year bond investors. Rates will rise, mortgage rates will rise and this may boost home sales as buyers attempt to lock in low rate loans. Many conservative investors could find their savings tied up in bond funds in the wrong place at the wrong time. The U.S. Federal reserve has pledged to keep rates low for the next 2 years; however in

March_14th_2012.mp3 Improving Data    Improving economic indicators increase confidence reversing negative media reports. Jobless claims fall to four year lows. U.S. Jobless Claims (Click For Larger Picture) Over the last decade uncertainty and fear has ruled, media reports have caused the markets to climb a wall of worry. Recent economic data is turning positive; The U.S. unemployment rate is seen holding at a three-year low of 8.3% in February. U.S. weekly jobless claims hitting a four year low. There are signs of improved home sales, retail sales, auto sales. European concerns are off the front page, Iran threats fade, equities surpass recent highs and are set to challenge all time record highs. Yet volumes suggest most have not participated in recent moves. There are many opportunities to make money but it requires action on your part, each stock selected must show risk/reward of at least 2:1. Make the call - let me provide you with a unique perspective on your investments

March_7th_2012.mp3 Consolidation    Three years after hitting a low The Dow Jones Industrial Index has doubled in value. Yesterday Global equities fell. Is it time to panic? Dow Jones Industrial Average (Click For Larger Picture) Three years ago March 6th 2009, the Dow Jones Industrial Average fell to 6,469 a week ago we hit 13,055.75 more than double. The advance had corrections along the way 14.6% in the spring of 2010, and 19.2% in the summer of 2011. So far in 2012 stocks advanced 6.9% and with yesterdays decline corrected 2.5%. Markets do not go straight up or straight down but there are days it seems that way. A minor correction is expected after a steep run up but with higher highs and higher lows a challenge of the 2007 all time high of 14,198.10 is expected over the next year a further 11% move. There are many opportunities to make money but it requires action on your part, each stock selected must show risk/reward of at least 2:1. Make the call - let me provide you with a u

February_28th_2012.mp3 Increased Confidence    Consumer confidence soared in February to 70.8% from 61.5% the highest level in a year. Nightly news casts are less pessimistic. Equities south of the border have surpassed 2011 highs. United States Consumer Confidence (Click For Larger Picture) Confidence is key, U.S. consumer confidence jumped to 70.8% in February up sharply from levels of low 40's a few months ago. There are many ways to analyze the market; Technical analysis studying various indicators, Chart analysis looking at patterns, Fundamental analysis measuring financial health, Common sense, Contrary opinion, Political analysis and my favorite "Fusion Analysis" a combination of the above. The worst results come from Consensus analysis and one we must guard against. This is a trading environment and requires active management it is paramount to think outside the box and apply Fusion studies along with risk/reward ratios to your investments. There are many opportunities to

February_22nd_2012.mp3 Challenging the Highs    Last year the S&P 500 stock index doubled from the lows set in 2009. Fear and bearish forecasts still surrounded equity markets pushing the S&P 500 index down 22% late in 2011. We are now back to the 2011 high and set to challenge all time highs. S&P500 Index (Click For Larger Picture) After doubling the S&P 500 index in 2011 from lows in 2009, the market fell 22% on European woes and Global debt concerns. News media and many market pundits remained negative. Pessimism ran rampant, Oil supply concerns, the U.S. debt ceiling, Chinese accounting, Russian corruption, Obama's future, Mid East theaters of war, political infighting and Bank reforms and Iran. A challenge of the all time high on the S&P 500 (1576.59) would involve a 220.21 point move, a 16.2% advance which is likely to occur as the economic recovery takes hold. There are many opportunities to make money but it requires action on your part, each stock selecte

February_15th_2012.mp3 Out of the Frying Pan, Into the Fire    Interest Rates are historically low but have been lower. Many investors could jump out the frying pan and into the fire. 30 Year US T-Bond Yield (Click For Larger Picture) In early 2009 after losing 57% in stocks many investors ran into 30 year U.S treasuries only to lose 25% in late 2009. Out of the frying pan and into the fire. Historically through thousands of years it has been found the normal rate of interest is 7%. If we move to that level U.S. 30 year Treasuries which currently yield 3.07% will lose 50% of their principal value. In 1981 some will remember the Canadian prime rate reached 23% and reached 2.25% in 2009. Many conservative investors could find their savings tied up in bond funds in the wrong place at the wrong time. The U.S. Federal reserve has pledged to keep rates low for the next 2 years; however investors and borrowers should be aware that rising rates could have catastrophic results. There are m

February_8th_2012.mp3 Emotional Outburst    Market emotion is turning positive. Despite media reports of a bankrupt Greece and rising tensions over Iranian nuclear development and Syrian suppression of another Arab spring. Market Emotion Cycle (Click For Larger Picture) Markets have always moved on emotions, usually FEAR & GREED, but over the last 3 years it has been desperation, panic, despondency, depression, disgust and doubt. It appears we are gaining confidence, with confidence you can reach truly amazing heights; without confidence, even the simplest accomplishments are beyond ones grasp. Stock markets are a leading indicator for the economy and it appears a shift is coming and optimism is slowly building. By the time the media picks up on this shift of attitude it will have moved the market. This is a trading environment and requires active management. There are many opportunities to make money but it requires action on your part, each stock selected must show risk/rewar

February_1st_2012.mp3 Clear and Sunny    Here comes the sun, the ice is slowly melting, it seems like years since it's been clear, the Beatles forecasted the current thaw of pessimism that has enveloped media and market pundits alike. Growth and profits are occurring south of our border. U.S. GDP Growth Rate (Click For Larger Picture) The panic that set in on the 2008 subprime mortgage meltdown caused stocks to crash down and left investors losing a decade of performance. Fears elevated to panic levels with media and market pundits suggesting a repeat of the great depression. Despite recent media attention and suggestions that we are headed into a recession which would be two quarters of negative GDP growth. The facts do not support that call. The recession ended in 2009 current growth is positive and the recent activity is influenced by businesses posting record earnings. So far in 2012 we have U.S. stocks measured by the S&P 500 index up 5.5% trading today at 1327.18. A

January_25th_2012.mp3 Confidence Rising    Uncertainty is waning, confidence is increasing and corporate earnings are up. Nightly news casts are less pessimistic. Consumer Confidence (Click For Larger Picture) Money Multiplier (Click For Larger Picture) Confidence is key, U.S. consumer confidence jumped to 64.5 last month up sharply from levels of low 40's a few months ago. Investors are starting to believe markets will achieve higher levels through increased economic activity. Money supply is at an all time high with World Governments spending at record levels to stimulate the economy but the multiplier of money had fallen to post war lows. The turn of a dollar had slowed from three times a day to less than once a day. With increased confidence and trust the velocity of money is increasing creating an improvement in economic activity and forecasts higher equity levels for North American markets. There are many opportunities to make money but it requires action on your part, each s

January_18th_2012.mp3 Inflation ? / Deflation ?    Inflation or Deflation; too many dollars chasing too few goods or too many goods with too few dollars. Consumer Price Index (Click For Larger Picture) Tomorrow the Consumer Price Index will be released for 2011. For those that remember the 80's with the Consumer Prices rising 14%, current levels are likely to show a mild 3.2% indeed there is a near-term risk of flipping to deflation with European concerns and the World Bank reducing its estimate of world GDP growth in 2012 from 3.4% to 2.5%. Over the last decade we have seen Consumer prices as high as 5.6% in July 2008, and as low as -2.1% in July of 2009. Inflation as a concern is relegated to the distant future. Developed economies have not fully healed and consumers are not yet ready to stand on their own two feet, any meaningful inflation is still a couple of years away. Perhaps it is time to reassess ones exposure to Golds and Oils that are so prevalent in Canadian Stocks and over

January_11th_2012.mp3 Record Earnings    Where is all the bad news media pundits were suggesting? It appears the economy is stronger than forecast. S&P 500 Earnings (Click For Larger Picture) Despite European woes and political infighting there are pockets of strength in North American markets. Indeed we are growing GDP to record levels albeit at a mild pace at this point in time. What is most encouraging and has not been reported widely is the fact that earnings by S&P 500 stocks is at an all time record high. Global positioning is changing right before our eyes, the once mighty Eurozone which was a contender for the number 1 spot pushing the U.S. economy out has slipped rapidly and China is now threatening to take out their number 2 position. India is now set to challenge theEurozone at a pace more rapid than originally thought. There are many opportunities to make money but it requires action on your part, each stock selected must show risk/reward of at least 2:1. Mak