Wednesday, November 26, 2014 02:39am
North Adams, MA now: 37 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
SIGN IN | REGISTER NOW   

Home About Archives RSS Feed
@theMarket: Inch by inch
By Bill Schmick On: 09:07AM / Saturday February 16, 2013
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0

 

Markets continue to grind higher with several averages, like the small and mid-cap indexes, hitting record highs. What little profit-taking occurs is met by buyers anxious to get into the market. I suspect this stage will continue for a bit longer.
 
We are only 3 percent away from the historic highs of the S&P 500 Index at 1,565. That magic number is acting like a magnet to bullish investors who argue there is no reason we shouldn't at least reach that number before giving some back. Seasonally, the first quarter is also kind to the stock market. All in all, enjoy the run and stay invested.
 
This weekend, the G20 group of finance ministers and central bankers will meet in Moscow. There was a time not long ago when investors would be holding their breath in anticipation of some new pronouncement involving the EU and Greece in particular. It appears those days are behind us.
 
The press has been playing up the risk of a currency war erupting between some nations, specifically those who make up the G7 countries. Where have they been? The devaluation of currencies has been going on ever since 2009. The U.S. dollar has been dropping against most currencies now for well over a year. The yen has plummeted 20 percent since November while the Euro has also lost value on various occasions.
 
This week the G7 countries — the U.S., Japan, Germany, Great Britain, France, Canada and Italy — issued a joint communique stating that domestic economic policies must not be used to target currencies. But every central banker will argue that most, if not all, of their nation's currency moves have simply been a side effect of their domestic policy. They argue that their stimulus policies have been targeting domestic growth, not a weaker currency.
 
Take our own Federal Reserve; it is on its third such stimulus program. It is true that the Fed's main objective is reducing unemployment by growing the economy. And both the Fed and the U.S. Treasury have been careful to publically insist on a strong dollar policy. But the facts are that the dollar has weakened and continues to do so in the face of our latest quantitative easing strategy.
 
A weak dollar helps our exports by making our goods cheaper to buy for overseas consumers.  Strong exports equate to higher domestic growth. And over the last two years our economy needed those export gains badly.
 
In Japan, the same thing is happening. Its newly elected government has taken a page out of our book. After years of stagnation, Japan is attempting to stimulate their economy by easing monetary policy. That has driven the yen much lower, which will help grow Japanese exports. The Germans are miffed by that strategy and have been complaining. Yet, Germany has benefited for years by exporting their products in Euros. The worth of the Euro is a heck of a lot cheaper than Germany's original export currency, the Deutsch mark. As a result, Germany became an export powerhouse in Europe.
 
The simple truth is that we have been dealing with these currency issues for several years now. The declines have been gradual for the most part. That way no one rocks the boat too much and competitors can adjust to currency changes over time. The sharp devaluation of the yen, however, has inconvenienced some G7 players and they are making their views known. I suspect that Japan has gotten the message and the pace of the yens’ decline will likely moderate from here.
 
Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


0 Comments
     
News Headlines
Oh Be Thankful Pie Auction Raises Funds for Charities
Pittsfield Council Accepts School Budget Law, Denies Hiring Authority Plan
Holiday Hours: Thanksgiving
Holiday Raffle to Benefit Berkshire County Arc, NAMI Berkshire County
Watch What You Eat to Avoid ER This Thanksgiving
'Breakfast With Santa' Set for Dec. 7
Williams PTO holding BJ's Fundraiser
MLK Jr. Day Committee Seeks Nominations for 2015 Peacemaker Award
Volunteer Matter of Balance Coaches Needed
Cultural Pittsfield This Week: Nov. 26-Dec. 4

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (151)
Independent Investor (204)
Archives:
November 2014 (3)
November 2013 (2)
October 2014 (9)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
May 2014 (9)
April 2014 (8)
March 2014 (6)
February 2014 (6)
January 2014 (8)
December 2013 (8)
Tags:
Fed Stocks Europe Housing Taxes Congress Commodities Stimulus Election Retirement Economy Rally Debt Deficit Bailout Oil Banks Stock Market Currency Greece Recession Metals Interest Rates Markets Crisis Japan Federal Reserve Fiscal Cliff Selloff Jobs Energy Europe Pullback Euro Debt Ceiling
Popular Entries:
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Don't Fight the Fed
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
The Independent Investor: The Pipeline Made Simple
@theMarket: Markets Are in Half Time
The Independent Investor: U.S. and China Square Off
The Independent Investor: Workers Get to Save More in 2015
@theMarket: All Clear
The Independent Investor: The Elephant in the Room
@theMarket: So far, So Good
The Independent Investor: OPEC's Oil Ploy
@theMarket: Are We There Yet?
The Independent Investor: Why Is This Recovery Different?


View All
Abbott School Pie Auction...
Gabriel Abbott Memorial School's annual Oh Be Thankful Pie...
Wahconah Football Reaches...
Salvatore grabbed the ball out of the air and sprinted 95...
Proud Pittsfield Fights to...
Pittsfield’s run in the postseason came to end on Westfield...
McCann Football's Run Ends in...
The McCann Tech Hornets road to Gillette Stadium and a...
Berkshire Chamber Showcase...
The Berkshire Chamber of Commerce held its Business 2...
Berkshire Grown Holiday...
Berkshire Grown held its Holiday Market in Williamstown on...
Wizards at Hoosac Valley
The Harlem Wizards faced off against Hoosac Valley staff...
St. Mary's Church Tour in...
Residents, business people, elected officials and Friends...
Williamstown's Mather House...
Traffic came to halt for several hours Wednesday morning as...
Girls Soccer: Nipmuc vs...
Although the Wahconah girls' season ended on Tuesday, its...
Boys Soccer: Belchertown vs...
Belchertown Downs Mount Greylock Boys in PKs
Football: Pittsfield vs...
Shade himself ended up taking it in from the 1 on third and...
Football: Turners Falls vs...
After completing the first-ever undefeated regular season...
Festival of Trees 2014
The Berkshire Museum kicked off its Festival of Trees...
Farmers' & Artisans' Harvest...
organic and handcrafted goods were sold at the special...
Football: Agawam vs Wahconah
The Wahconah football team was down eight points heading...
Abbott School Pie Auction...
Gabriel Abbott Memorial School's annual Oh Be Thankful Pie...
Wahconah Football Reaches...
Salvatore grabbed the ball out of the air and sprinted 95...
Proud Pittsfield Fights to...
Pittsfield’s run in the postseason came to end on Westfield...
McCann Football's Run Ends in...
The McCann Tech Hornets road to Gillette Stadium and a...
Berkshire Chamber Showcase...
The Berkshire Chamber of Commerce held its Business 2...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings
Advertise | Recommend This Page | Help Contact Us | Privacy Policy| User Agreement
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2000 Boxcar Media LLC - All rights reserved