Jeremy Nelson, Pinnacle Trust’s Chief Investment Officer, presents our 2012 forecast for the economy and the financial markets.
To view part two, click here.
2012 Economic & Market Forecast (Part 2)
Filed under Economic Outlook, Government & Money, Market Update, Stocks
Financial Forecast Scheduled
Pinnacle Trust’s annual Economic & Market Forecast luncheon has been scheduled for Thursday, February 2nd, from 11:30 a.m. until 1:00 p.m., at River Hills Club in Jackson, Mississippi. The event will feature Stacey Wall, Pinnacle Trust’s President and CEO, and Jeremy Nelson, Pinnacle Trust’s Chief Investment Officer.
Lunch will be served and seating is limited. To reserve your seat, contact Wendy Cockrell at wcockrell@pinntrust.com or call 601-957-0323.
Wall has given his annual forecast on the economy and the markets since 1994.
What others are saying:
“Stacey Wall has been one of our state’s foremost economic and market analysts for twenty years. He has the uncommon gift of being able to explain difficult material in a way that is both informative and entertaining. I never miss a chance to hear him speak, and, good news or bad, I always leave confident that I know more than I did before his presentation.”
-Andy Taggart, Attorney
“Jeremy has the unique ability to help people understand dynamic global markets, and the impact it has not just their investment portfolios, but their lives as well.”
-Kimberly C. McCoy, CPA
2011- Year In Review
2011 was a volatile year characterized by three distinct phases. The year started off well, with stocks moving higher through April. From May to September, a bear market ensued before we entered the post-market bottom environment from October to December. After everything had been tallied, the S&P 500 finished the year right where it started. The DJIA posted gains, and the NASDAQ declined slightly.
Filed under Financial Planning
Weekly Market Update—Merry Christmas
The DJIA fell below 12,000 as it slipped 2.61% last week. The S&P 500 fell 2.83%, while the tech stocks got hit the hardest with the NASDAQ falling 3.46%. Broadly, stocks are in negative territory for the year. The DJIA currently stands as the only index in positive territory. Large cap stocks have outperformed small cap stocks and domestic equities have significantly outperformed international stocks.
The Federal Reserve Open Market Committee noted that the economy has been “expanding moderately” and gave no indication that additional quantitative easing measures are on the way. However, they will leave the fed funds rate at 0.25% and will continue to replace short-term bond holdings with longer dated maturities in an effort to keep long-term interest rates down.
Filed under Financial Planning
Housing Continues to Stabilize
The NAHB/Wells Fargo Housing Market Index climbed two points in December, up for the third straight months, to 21, the highest level since May 2010. Economists expected an unchanged reading of 20, but the prior month was revised down by one point to 19. Although builder confidence remains low by historical standards, the improvement indicates “pockets of recovery are slowly starting to emerge in scattered housing markets,” according to the NAHB. All three index components improved in December, led by a three-point gain in the traffic of prospective buyers to its highest level since May 2008.
The South, which experienced some of the harshest housing bubble-bust consequences, saw the largest improvement in builder confidence to its best level since March 2008. Other regions were mixed. We expect housing market news to continue to show this segment of the economy is stabilizing, a sign residential investment will not be a drag on output growth in 2012.
Filed under Economic Outlook
PMI Indicates Global Slowdown
PMI, or Purchasing Managers’ Index, is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
A PMI of more than 50 represents expansion of the manufacturing sector compared to the previous month. A reading under 50 represents a contraction, while a reading at 50 indicates no change.
The chart below shows the PMI for major economies around the globe. The sluggish growth of the U.S. leads the way, and only 6 countries listed are in a growth mode. This is a stark contrast from the first of the year when 22 countries were showing growing activity.
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PMI SUMMARY |
|
|
United States |
52.7 |
Growing |
|
Russia |
52.6 |
Growing |
|
Turkey |
52.3 |
Growing |
|
South Africa |
51.6 |
Growing |
|
India |
51.0 |
Growing |
|
Israel |
50.7 |
Growing |
|
Global |
49.6 |
Contracting |
|
Poland |
49.5 |
Contracting |
|
Japan |
49.1 |
Contracting |
|
Singapore |
48.7 |
Contracting |
|
Brazil |
48.7 |
Contracting |
|
Czech Republic |
48.6 |
Contracting |
|
Ireland |
48.5 |
Contracting |
|
Germany |
47.9 |
Contracting |
|
Hungary |
47.8 |
Contracting |
|
Australia |
47.8 |
Contracting |
|
Denmark |
47.7 |
Contracting |
|
China |
47.7 |
Contracting |
|
United Kingdom |
47.6 |
Contracting |
|
Sweden |
47.6 |
Contracting |
|
Austria |
47.6 |
Contracting |
|
France |
47.3 |
Contracting |
|
Korea |
47.1 |
Contracting |
|
New Zealand |
46.5 |
Contracting |
|
Euro-Zone |
46.4 |
Contracting |
|
Netherlands |
46.0 |
Contracting |
|
Switzerland |
44.8 |
Contracting |
|
Italy |
44.0 |
Contracting |
|
Taiwan |
43.9 |
Contracting |
|
Spain |
43.8 |
Contracting |
|
Greece |
40.9 |
Contracting |
|
Data for Israel and New Zealand through 10/31/2011. All other data through 11/30/2011. Source: Haver Analytics and Ned Davis Research |
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While the U.S. certainly looks better on a relative basis, it is highly unlikely that global problems won’t continue to be a drag on our economy. We remain mildly bullish for now. – Stacey Wall
Tebow Time for Stocks?
With the Dow Jones Industrial Average right about where our Ned Davis 2011 Cycle Composite said it would be, does the market have a Tim Tebow-like year-end rally left?
Europe and political gridlock continue to cast a dark shadow on the financial markets. Recent rallies have lacked a significant amount of volume and there appears to be an overabundance of supply. Our indicators have been on neutral 63% of the time this year, suggesting the trading range that we’ve experienced.
Yet, our Cycle Composite does suggest a year-end rally. Tebow time? – Stacey Wall
2012 Economic & Market Forecast (Part 1)
To view part one, click here.
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Filed under Economic Outlook, Government & Money, Market Update, Stacey Wall Commentary, Stocks