Forgive me if I show a lack of enthusiasm with the market today. After all, it is Friday and even though I don’t have a 9 to 5 job, I still get that TGIF feeling. As well, I am somewhat bored with the necessity of having to work through a highly predictable market, one focused primarily on the antics in Washington.
- Stocks fell on Friday as investors focused on the risk that the U.S. government could shut down next week.
The market is down today, and I expect it will remain to the downside at least through Tuesday, if not a few days beyond that. Fed tapering is long gone from the news, but a US government shutdown is everywhere, and that has infected the mind of the US consumer.
- The final reading for the University of Michigan’s Consumer Sentiment Index for September was reported at 77.5, which was below the consensus reading of 78.4 and below last month’s final reading of 82.1. The September reading was the lowest since April.
Since I am bored, and it is Friday, I want to move my attention to China, you know, just to shake things up a bit.
- The general consensus is still pretty bearish on China. The feeling is that the country’s best days of growth are behind it. China will never enjoy 10% annual GDP growth again. But its growth rate still puts all developed markets and most emerging markets to shame. And the recent data coming out of China is encouraging.
Yes, the recent data out of China is encouraging, and, clearly, the market cares little about that right now, but, often, this is the best time to get into a market. Bypassing the news to see what is really happening is a key to making money.
- China rail cargo volumes measured in tons-carried improved by 3.9% year on year according to July statistics. A reversal of a negative trend dating back to Feb 2013.
China ETFs are one way to invest in the China market. There are a number of them, but make sure you look at each carefully. One important consideration is trading volume. Make sure the ETF is not thinly traded, because you might find it easy to get in, but not so easy to get out.
One more thought today …
- The outlook for gold in 2014 is looking positively dicey if you go by the views of several investment banks lately.
- Given the unfolding rebound of global economic growth, we believe the more cyclical precious metals, including silver, are likely to outperform gold.
I am not an investor in precious metals, but many folks are, so looking forward to 2014 is helpful. Although, I am not a follower of analysts, per se, I do look at their reasoning, and I agree with the reasoning for gold’s weak performance in 2014. It comes down to China, the US, Japan, and Europe. The idea is that all will be better in 2014.
Yep, it is the fundamentals.
Trade in the day; Invest in your life …
