WHEN the Bull Market Ends

The latest Street$marts is here…

http://www.investfortomorrow.com/newsletter/CurrentStreet$marts20120905.pdf

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Keeping an Eye on Those Canaries

The latest Street$marts is out.

http://www.investfortomorrow.com/newsletter/CurrentStreet$marts20120801.pdf

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Markets Pricing in Weak Earnings

Earlier this week, I did an interview with Fox Business about the possible increase in taxes when the Bush/Obama tax cuts expire in December.  Later in the segment, we discussed earnings season, which began this week with Alcoa, and how just one quarter off record earnings, investors are becoming so pessimistic.

While it certainly feels like a negative year in the markets, the major indices remain in the black for 2012.  In fact, the year is very closely following the typical presidential election year with a Q1 rally, springtime low and summer rally.  If this continues to hold, we should see a fall swoon to a bottom before the election and then robust year-end rally.

http://video.foxbusiness.com/v/1727305534001/heritage-capital-president-markets-pricing-in-weak-earnings

To view any and all previous spots in the media, please visit: http://www.investfortomorrow.com/InMedia.asp 

Paul

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Stocks Slide on Tepid Jobs Growth Number

On Friday’s CNBC segment, I spoke about the range bound market with the potential for a fall swoon before the election.  But in any market, there are always opportunities and this time is no different.

http://video.cnbc.com/gallery/?video=3000101361&play=1

So far this week, stocks have not behaved well, but it’s far from a rout and the trading range continues. On Wednesday, we get a peak at the minutes from the Fed meeting and folks will take any scrap of comments that leads to QE3 coming.  As I have said since QE1 was launched, we will see QE2, 3, 4, 5 with the Fed’s balance sheet approaching $5 trillion.

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Summer Rally, Pre-Election Sell-Off

http://www.newsmax.com/StreetTalk/Heritage-Capital-stock-rally/2012/06/27/id/443591

The stock market will experience a summer rally, followed by a sell-off in the fall right before the election, Paul Schatz, chief investment officer of Heritage Capital LLC, told Yahoo.

Schatz said the first half of the year had a few unique twists, but it has been fairly typical for election-year market indices.

“It’s been an interesting first half,” he said. “We were vertical for a while and then we gave almost all of it back and now we’re kind of treading water in no-man’s land.”

Schatz predicted we already had a springtime low.

“The early June lows are going to be the lows for a while,” he told Yahoo.

“We will rally and peak some time at the end of July to the end of August. Then we’ll have the traditional sell-off before the election, postconventions.

“Stocks already had the summer declines we saw in 2011 and 2010,” he stated. “It’s rare when you see it three years in a row. … I don’t think it’s anything near what we saw last year.”

After the election, Schatz expects a year-end rally.

“So many of the bogeys for the market are known, everyone is worried about the same thing — the fiscal cliff, the euro, Greece, Spain, Italy — they’re all on the table now,” he added.

Schatz predicts that the problems in Europe will loom for the next several years.

“They’re going to get their act together this decade. It may take three, five or seven years to get their act together, because the alternative is nonexistence,” Schatz noted. “I mean Europe won’t exist. I’m not talking about the euro, I mean the continent.”

Europe will take its “sweet time,” but will be fine in five to 10 years.

“We’ve been underweight Europe forever and will stay underweight,” he added.

Regarding the fiscal cliff, Schatz said, “When push comes to shove, the lame duck Congress comes in, they make the middle-class tax cuts permanent, they extend the upper-class tax cuts for another six, 12, 18 months and let the next group worry about it.

“But I don’t think they’re going to solve that now,” he added. “There’s no impetus, there’s no catalyst for it.”

By the end of the year, Schatz predicts that the S&P 500 will be “1,400ish” and says he will keep an overweight position in biotechs.

Meanwhile, the so-called “fiscal cliff” looming at the start of 2013 with planned tax increases and spending cuts may begin to push the U.S. into a recession as early as the second half of this year, Bank of America’s top U.S. economist Ethan Harris tells Fortune.

Last month, the Congressional Budget Office warned the fiscal cliff could cause GDP to shrink by 1.3 percent in the first half of 2013, even as many economists are betting the politicians in Washington will cut a deal to avert the worst effects of the measures.

Harris says the fiscal cliff will begin to make itself felt long before it actually takes effect. Corporate earnings will slow in the second half and job growth may drop to nothing by October, pushing the United States towards the brink of another recession.

Read more on Newsmax.com: Heritage Capital CIO Expects Summer Rally, Pre-Election Sell-Off
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