Daily Gains Letter ( — www.DailyGainsLetter.com), an e-letter published by Lombardi Publishing Corporation, a 28-year-old consumer publisher that has served over one million customers in 141 countries, is weighing in on the recently announced November jobs data. Daily Gains Letter is also commenting on what investors should look for in the remaining weeks of 2014 and in 2015 to potentially turn a profit.
“With QE3 gone and higher interest rates looming on the horizon in 2015, the stock market is looking for direction from retail sales during the next few weeks and the jobs reading,” says financial analyst George Leong. “While major retailers offered positive metrics on Black Friday, spending actually fell 11% on the weekend at traditional brick-and-mortar stores. The same cannot be said for Cyber Monday, where online sales soared 17% year-over-year to a record $2.04 billion.”
Leong explains that consistent growth in U.S. job numbers should provide investors with growing optimism, as the U.S. has managed to generate more than 200,000 new jobs monthly for the majority of the year. On Friday, December 5, the U.S. Department of Labor announced that U.S. employers added 321,000 jobs, the largest one-month gain in nearly three years and easily surpassing analyst expectations of 231,000 jobs. The unemployment rate, meanwhile, was unchanged at a multi-year low of 5.8%. (Source: “The Employment Situation – November 2014,” U.S. Bureau of Labor Statistics web site, December 5, 2014; www.bls.gov/news.release/empsit.nr0.htm.)
Leong observes that adding the growing confidence in the jobs market to continued higher home prices and wealth creates the raw materials to drive consumer spending, gross domestic product (GDP) growth, and the stock market. One concern is that homeowners are increasingly using home equity for expenditures; the risk here is that as interest rates rise in 2015, the carrying costs will also increase.
Another major risk factor in 2015 will continue to be the stalling in China, Russia, and the eurozone, as economic data from all three regions are showing some signs of this. Moreover, the eurozone’s most influential and largest member, Germany, is seeing some slowing. (Source: Inman, P., “Eurozone economy stumbles raising fears of new year recession,” The Guardian web site, December 3, 2014; www.theguardian.com/business/2014/dec/03/eurozone-economy-stumbles-raising-fears-new-year-recession.)
“Why I’m concerned with the slowing in the global economy is that it will be a drag on the domestic economic renewal and, ultimately, the U.S. stock markets. Close to 40% of U.S. companies get their sales from abroad, so a slowing global economy means slowing sales for these businesses,” Leong concludes. “The most prudent thing for investors to do at this time is to continue to ride the gains, but also take some money off the table. And, of course, use put options to hedge against downside risk.”
For more information on Daily Gains Letter, visit www.DailyGainsLetter.com. Lombardi Publishing Corporation, founded in 1986, has served over one million customers in 141 countries around the world. For more information on Lombardi Publishing Corporation, visit www.lombardipublishing.com.
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