Daily Gains Letter

Jobs Numbers

Every month, the Bureau of Labor Statistics releases information regarding the jobs numbers, which shows how the underlying economy is performing. Also called non-farm payrolls, since they do not include farm-related employment, the jobs numbers are one of the most important data sets for trying to understand the strength or weakness of an economy. If the jobs numbers are improving, this means more people are being employed and the economy is gaining strength. If the jobs numbers are weakening, or there are outright job losses, this is an extremely troubling sign for the economy.


The “For Sale” Sign on Precious Metals



Sign on Precious MetalsDo you feel wealthier today compared to last year? According to the Federal Reserve, you should, as the household net worth of Americans rose 2.5% between the second and third quarters of 2013 for a total of $77.3 trillion. (Source: “Financial Accounts of the United States,” Federal Reserve, December 9, 2013.) The Federal Reserve calculates household net worth by looking at the value of stocks, homes, and other assets, minus mortgages and debts. In fact, the nominal total wealth is at a record high. Adjusted for inflation, the current level of net worth is approximately one percent below the peak prior to the Great Recession. On paper, it appears as though econom ... Read More



How to Survive This Stock Market



Survive a Stock Market with Little ChoiceThe bulls are out in full force again following a pause in the stock market. Investors were initially spooked by the fear of interest rates moving higher in the first quarter of 2015, but that appears to have been pushed to the backburner now as the stock market rally reignites. The thing is there are few real alternatives to the stock market—unless you are happy with the 2.42% yield on the 10-year bond. Personally, I would rather invest in dividend paying stocks. There’s nothing spectacular about the stock market and economy at this time. Things seem to be moving just enough to warrant buying an ... Read More



Why This Company Will Fare Well as the Economy Stutters



My Investment Solution for Tight TimesIf you think Americans are firmly comfortable in the economy and jobs, think again. Yes, the stock market has returned strong gains and has been an investment opportunity over the past five years (since the end of the Great Recession in 2008), but much of it was artificially driven by the lax monetary policy put forth by the Federal Reserve. Now that the quantitative easing is dissipating and interest rates are set to edge higher sometime in mid-2015, I’m not all that comfortable. The jobs numbers are improving, but they are still well below the 500,000 per month that some pundits deemed ... Read More



What Makes This Beaten-Down Stock So Attractive



A Better Investment Opportunity Than My Top Restaurant StockChipotle Mexican Grill, Inc. (NYSE/CMG) showed why it’s the hottest restaurant stock out there at this time. The stock has been a favorite of mine since declining to the mid-$200.00 level in October 2013. On Tuesday, the stock surged to above $650.00. Now that’s growth and an excellent investment opportunity. The company easily destroyed estimates in both revenue and earnings. Chipotle beat the consensus earnings per share (EPS) estimate by a whopping $0.41 per diluted share and surpassed the $1.0-billion quarterly revenue mark for the ... Read More



Stocks vs. Bonds: Finding the Best Investment Opportunity Right Now



Why You May Be Stuck with Stocks for NowThe bulls are continuing to ride the stock market higher with minimal resistance from the bears. After some weakness earlier in the year, stocks continue to want to edge higher. We are not seeing the mass market participation we want to see in a rallying stock market, but this divergence is clearly not a big deal for traders. The first half of 2014 saw mixed trading, but the stock market managed to edge higher. We saw multiple records set by the DOW and S&P 500, with both indices closing higher for the fifth straight month in June. Not bad given that historical records suggest muted action ... Read More



How to Profit from the Improved Jobs Numbers



How Investors Can Benefit from the Jobs RecoveryThe stock market is looking higher. The DOW and the S&P 500 closed up for the fifth straight month as we enter into the second half of what has largely been a mixed and cautious year. For growth investors, the good news is that small-cap stocks came back in June with a 5.15% advance and are easily leading the broader market. Technology also fared well with the NASDAQ up 3.9% in June. Blue chips and large-caps trailed the growth side. In the first half, the S&P 500 leads with a 6.07% gain followed by the 5.54% advance in the NASDAQ. And while stocks are edging higher towards new records, we are also seeing positive gains in the critical jobs num ... Read More



What’s Handicapping First-Time Homebuyers?



First-Time HomebuyersFor months and months now we’ve been pointing to seemingly obvious economic data to prove that the U.S. housing market is in trouble because of the weak U.S. economy. Those in the “know”—economists and the real estate board—have been waxing eloquence on how the weather is the main culprit behind the disappointing U.S. housing market numbers. The National Association of Realtors (NAR) said existing-home sales in December were adversely affected by bad weather in many areas. Sales of existing homes in January were down 5.1%, reaching their lowest levels in 18 months. At the time, the NAR echoed i ... Read More



Two Precious Metal Plays for Waning Consumer Confidence



Two Precious Metals PlaysAgainst a backdrop of record-highs for stocks, consumer confidence is waning—seeing its greatest drop in four months. The S&P 500 touched record intra-day territory earlier in the week, suggesting the bull market remains intact and the well-earned and (far too) short-lived mini correction may be over. Investors and analysts, it seems, have embraced blaming the cold weather for all our economic ills, effectively brushing aside weak U.S. housing numbers, jobs data, and manufacturing and retail sales. Meanwhile, consumers—those who need jobs, houses, cars, and other items that suppor ... Read More



How American Investors Can Profit from the Canadian Economy’s Demise



American InvestorsOur neighbor to the north is facing some headwinds. In Canada, there are troubles developing that may drive the country toward an economic slowdown. In 2008, the ripple effects from the U.S. economy into the global economy caused an economic slowdown in many countries. The Canadian economy was one of the few nations that didn’t suffer a major hit; it was able to stand strong. Now, Canada may not be able to stay on such strong footing, as it faces a possibly severe economic slowdown due to a few phenomena that are starting to line up to create a perfect storm. First of all, the housing market in the Cana ... Read More



Why Fed’s Change of Plans Doesn’t Mean a Change in the Stock Market



Change in the Stock MarketIs it an early Christmas present or a really early April Fools’ Day trick? In a somewhat surprise move, the Federal Reserve decided the U.S. economy was doing well enough that it could start to cut back on its generous $85.0-billion-per-month quantitative easing (QE) strategy. I say “surprise” because the Federal Reserve initially said it wouldn’t consider tapering until the U.S. economy was on solid, sustainable economic ground, which meant an unemployment rate of 6.5% and inflation of 2.5%. Today, unemployment sits at seven percent and inflation is near historic lows at below one percent. Against a weak economic backdrop, the Federal Reserve made a brave ... Read More



October Job Numbers a Tale of Two Economies



October Job NumbersAre the recent U.S. job numbers a tale of two economies? The Labor Department announced last Friday that U.S. employers added 204,000 jobs in October, beating even the most optimistic estimates. The U.S. unemployment rate, which is based on a separate survey and counted furloughed federal employees as out of work, rose from 7.2% in September to 7.3% in October. In a world where good news is bad for investors, stocks fell after the opening bell. Why? Because investors are afraid that better job numbers will prompt the Federal Reserve to start tapering its $85.0-billion-per-mo ... Read More