Most all of us stay close to family, even the extended ones. We at J.L. Davis certainly do. But there are times when you’d like to stay even closer, as we were joltingly reminded of last week.
This week’s Update will delineate the market news of the day as always. But for a not-so-gentle reminder of what’s really important, you’ll want to read the attached right away.
Best always,
Lee and Jeremy
This Week’s Quote:
“I know of no higher fortitude than stubbornness in the face of overwhelming odds.”
― Louis Nizer (1902-1994) noted “lawyer to the famous”, author, lecturer, artist
JL Davis Thoughts This Week:
One of our top clients received some sobering news from a family member last week. His only brother was just diagnosed with Stage 4 lung cancer and given 3 to 6 months to live.
Our client’s older brother is quite a story. Raised in California in the late 50’s and 60’s he developed a hard driving work ethic born of a burning desire to be successful. That strong ethic is almost always masked by a quiet exterior and gentle manner. A soft, knowing smile that perennially creeps across his face in every encounter, along with a wry, wicked sense of humor are just a few of the endearing personality traits this fine man exhibits, even to this day, in the face of some pretty long odds.
This gentleman and his sweet wife (who sadly passed away) raised six children. All adore their father, including in particular one beautiful daughter who passed away far too young about two years ago. His four grandchildren adore him too, of course, and are praying for their “Papa.”
During his business career, he applied his substantial talents to the telephone industry, becoming a sought after expert in the complex systems of the day that supported both consumer and government operations across the U.S. When a serious problem came up, you could find him on a plane, getting there in record time to handle the issue. A no-nonsense leader, he organized teams that executed the needed “fix” which kept those systems running and secure. Again and again.
Retiring in Washington State a few years ago, he quickly learned what Michael Corleone of “Godfather” movie lore meant when he said, “Just when I think I’m out, they pull me back in again.” He was highly sought after even in retirement. He was ultimately engaged to do consulting and training across the country on the same systems he worked so hard to keep running for over 30 years. Finally, in the last six months or so he began saying no to further requests.
As of yesterday, his 9th consecutive day in the Seattle area hospital where he’s trying hard to breathe well enough to get back home, he’s exhibiting the same dogged determination that has served him so well as a father, a husband, an executive, and a brother. It would be foolish to bet against him, regardless of the statistics.
Here’s hoping my brother prevails in this battle of his. Godspeed. I loved the 3 days we just spent together in that hospital, in spite of the circumstances. being there with him, his new wife and my nephew was truly special, and an experience I’ll never forget. The rest of his kids are on their way to see him and will be there this week. Our family will be in close touch, of course. Our thoughts and prayers are with him.
So this week, perhaps take a moment to reach out to your family members. Perhaps call when you might not have. Talk just a little longer than usual. You just never know when one of them might need your support in ways you never imagined.
Lee**
Market Week: March 10, 2014
The Markets
Fab five: The S&P 500 marked the fifth anniversary of the stock market's post-2008 low by recording another all-time record close. Once again, the Dow couldn't quite manage to break even for the year, though it came close, while the small caps had the week's strongest gains. The benchmark 10-year Treasury yield rose as investors seemed to place more importance on better-than-expected domestic economic data than on potential fallout from the tension over Ukraine.
Last Week's Headlines
• The unemployment rate edged upward to 6.7% and away from the 6.5% that would have led to increased speculation about the Federal Reserve possibly accelerating an increase in interest rates. According to the Bureau of Labor Statistics, the increase--the first since December 2012--occurred despite the U.S. economy adding 175,000 jobs in February. The BLS noted that severe weather could have had an impact on its survey results.
• Spending rose faster than personal incomes in January, according to the Bureau of Economic Analysis. Personal income was 0.3% higher for the month, while consumption was up 0.4%.
• Construction spending was up 1% in January, primarily because of gains in the housing sector, but gains were much lower than December's 2.2% increase. The Commerce Department said residential building was led by a 2.3% gain in construction of single-family homes, while nonresidential construction was down 0.2% and government construction fell 0.8% during the month.
• U.S. manufacturing rebounded a bit in February as the Institute for Supply Management®'s gauge rose by 1.9% to 53.2%. Meanwhile, the ISM's services survey showed growth slowing by 2.4%, though the 51.6% reading still represented growth.
• The European Central Bank declined to adopt fresh stimulus measures to combat a less-than-desirable 0.8% inflation rate there. The ECB left its key interest rate unchanged at 0.25% and the rate on overnight bank deposits at 0%. Meanwhile, economic recovery accelerated in both the 18-member eurozone and Europe as a whole; European GDP rose 0.3% during Q4 2013 and was up 0.4% in the eurozone.
• China announced a 2014 target growth rate of 7.5%--slightly lower than 2013's 7.7%--and a target inflation rate of 3.5%. Also, China's General Administration of Customs said exports fell 18.1% in February, leading to a nearly $23 billion trade deficit; the sharp decline in exports was surprising given January's 10.6% increase.
• The frigid weather that socked in much of the nation in February made an accurate assessment of economic data more difficult, according to the Federal Reserve's "beige book" report. However, the report expressed optimism that the economy will show improvement once the weather does.
Eye on the Week Ahead
In a week that's light on economic data, the Ukraine situation could assume greater importance in market psychology. Investors also may begin anticipating the following week's Federal Reserve monetary policy meeting.
Data sources: All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: U.S. Treasury (Treasury yields); WSJ Market Data Center (equities); Federal Reserve Board (Fed Funds target rate); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold, NY close); Oanda/FX Street (currency exchange rates). 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. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
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 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.
Prepared by Lee Davis** and Broadridge Investor Communication Solutions, Inc. Copyright 2014
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