Even the eternal optimists at JL Davis are slightly weary this week, as friends, clients, -- and yes, our family members-- begin to bail out from the devastating Colorado flood, the likes of which haven’t been seen in generations.
This week’s Update focuses on the awesome display of nature last week in the Centennial state and the even more awesome display of its citizens as they mobilize to overcome these catastrophic events.
So, forgive us for the interruption in our normal recitation of all things financial as we pay homage to the indomitable spirit of great people who will somehow get through this. As is our charge, we do include last week’s market machinations in the attached.
We know that just as we are, many who read this missive are already mobilized to help and for this we are most thankful.
For all those affected, we are with you all.
Our best,
Lee and Jeremy
This Week’s Quote:
“What is the appropriate behavior for a man or a woman in the midst of this world, where each person is clinging to his piece of debris? What's the proper salutation between people as they pass each other in this flood?” ~ Buddha
JL Davis Thoughts This Week:
As the images of the Colorado flood devastation began to pour in from the television and print media, perhaps like you we stared in disbelief. Having moved to Colorado in 1975 and witnessed any number of natural events, we’d never seen anything like this.
Late last week as the deluge continued out of control, we began client calling our clients in the Boulder area to see how we might be of assistance. By last weekend’s conclusion, we were making the same calls to northern Colorado where Christy Perkins and her family (Lee’s daughter and Jeremy’s sister, who runs JL Davis Benefits, LLC) have a beautiful home on a modest acreage.
Floodwaters from the overflowing Platte along with its assorted tributaries struck particularly to Christy’s place as rains not seen in generations continued. Thankfully, the family is ok, as is their home, barn, animals and out buildings. The property sits on a hill and though the waters are near, they stayed a short distance away. Others were not so fortunate; hundreds and hundreds of homes and buildings in the affected areas are completely inundated with the muddy water.
Highways and roads are simply gone; washed away. Families in the area like Christy’s must travel about 40 miles out of the way for supplies. Fortunately, the Perkins’ have always made certain they were prepared out “on the farm”. But even they never envisioned something like this. Neighbors for miles around are homeless, their places underwater; cars, equipment ruined. Fences are down and animals are loose, if not lost. Unreal.
It’s times like these when we turn to one another for help and support. True to form, The Perkins’ and others are doing what they can for families in the area. Christy, husband Glen, and their children Haley and Dawson are busily assisting neighbors and those in need throughout their immediate area. In addition to her professional work and to being a Mom, Christy is a trained EMT and Firefighter who routinely volunteers in the community, so her efforts at this time are nothing new. We are proud of her—and the Perkins family.
The rest of us can get involved too. With thanks to Senator Mark Udall, here are some immediate resources to our friends in Boulder, Larimer, Adams, and Weld Counties:
First, they can immediately register for disaster assistance by calling 1-800-621-FEMA (3362) or by visiting DisasterAssistance.gov. As well, small businesses affected by the flooding can register a claim with the Small Business Administration. For a list of housing resources available, HUD has a resource page for Colorado flood victims. Farmers seeking assistance can visit the Farm Service Agency’s Disaster Assistance Programs resource page. The Federal Emergency Management Agency also has a flood resource page to help folks in the aftermath.
The Red Cross and United Way agencies are mobilized, as is Catholic Services and a range of other social and religious charities. JL Davis is contributing to them as we speak and we encourage others from around the country to do so as well.
Our wonderful JL Davis clients and friends will get through this, as will Christy and her family. The road ahead is long and arduous but it is one we will travel together. Our hearts, thoughts and prayers are with all those families. Godspeed, all. **
Page 1 of 2, see disclaimer on final page
Market Week: September 16, 2013
The Markets
After weeks of uncertainty, investors last week seemed to feel more optimistic about the prospects for averting both conflict in Syria and heavy-handed tapering at home by the Federal Reserve. Three straight days of triple-digit gains gave the Dow industrials their best week since the first of the year, and the small-cap Russell 2000 was only nine points from its all-time high set in early August. The Nasdaq also surpassed its August high. Equities data reflect price changes, not total return
Last Week's Headlines
• The United States and Russia jointly announced an agreement over the weekend that would establish a framework for confiscating and destroying chemical weapons in Syria by the middle of 2014. The agreement would refer the issue to the United Nations Security Council for action if Syria fails to comply with the terms of the bargain.
• Strong sales of autos, electronics, furniture, and appliances continued to push up overall retail sales in August. The Commerce Department said the 0.2% bump was the fifth straight monthly increase. However, back-to-school sales of clothing as well as sporting goods and building materials saw weakness.
• Wholesale prices rose 0.3% in August, according to the Bureau of Labor Statistics. That was more than in July but less than June's 0.8% increase, and put the annual wholesale inflation rate for the last 12 months at 1.4%.
• The Dow Jones Industrial Average got a makeover as S&P Dow Jones Indices replaced Alcoa (which had been part of the Dow for 54 years), Hewlett-Packard, and Bank of America with Nike, Visa, and Goldman Sachs. S&P said the change--the most dramatic in almost a decade--was made to increase the index's industry and sector diversity. The relative stock prices of the companies being ousted also was a factor, as stocks are weighted within the index by their price.
• Economic data from the world's second largest economy was generally encouraging. China's National Bureau of Statistics said factory production was up 10.4% in August from a year earlier and up 0.7% from July. Retail sales there rose 13.4% in the same time. Government spending on fixed assets such as infrastructure projects increased by 20.3% year-over-year, while private investment in fixed assets was up 23.3%. The consumer inflation rate was up 0.5% for August and 2.6% on an annualized basis.
• Deposits in foreign branches of U.S. banks will not automatically be insured by the Federal Deposit Insurance Corp. In response to a proposed British banking regulation, the FDIC approved a rule that clarifies the status of such deposits and provides insurance for them only if the money in those accounts is dually payable in the United States. The FDIC said some large U.S. banks will be changing their deposit agreements to make such funds payable in both the United States and the United Kingdom so that if a bank fails, overseas accounts will have the same status as those of the bank's U.S. depositors. The rule does not affect deposits in overseas military banking facilities that are governed by Department of Defense regulations, which continue to be insured by the FDIC.
• Verizon's sale of $49 billion worth of bonds to help finance its acquisition of Vodafone's shares of Verizon Wireless set a record for the largest single sale of corporate debt in U.S. history. The sale almost tripled the previous record of $17 billion worth of bonds issued by Apple last April.
• Former Treasury Secretary Lawrence Summers, a leading candidate to replace Ben Bernanke as chairman of the Federal Reserve Board, withdrew his name from consideration.
Eye on the Week Ahead
Economic data will be eclipsed by anticipation of and reaction to the Federal Reserve's monetary policy meeting, which ends Wednesday. If the Fed cuts its bond purchases less than anticipated or continues them at the same level, that decision coupled with the announcement of a U.S.-Russian deal on Syrian chemical weapons could leave investors sighing with relief. On the other hand, larger-than-expected reductions in bond purchases could mean the opposite. Quadruple witching options expiration at week's end also could affect volatility.
Key dates and data releases: industrial production, Empire State manufacturing survey (9/16); consumer inflation, international capital flows (9/17); Federal Open Market Committee announcement/forecasts, housing starts (9/18); home resales, Philly Fed manufacturing survey (9/19); quadruple witching options expiration (9/20).
All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment
Prepared by Lee Davis** and Broadridge Investor Communication Solutions, Inc. Copyright 2013
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