Daily Gains Letter

economic outlook 2015


Greece and Eurozone to Fall Into Economic Turmoil? How to Profit

By for Daily Gains Letter | Feb 11, 2015

Greece and Eurozone Fall In Economic TurmoilThere is yet another Greek tragedy playing out across the Atlantic, where legendary poets, mathematicians, scientists, and thinkers once roamed. Fast-forward several thousand years and the country once known for its proud history is cracking at its foundation, burdened by tens of billions in debt and fiscal chaos. (There is a way investors can profit from Greece’s potential demise, but more on that later…)

Syriza Party to Negatively Change Economic Outlook in Eurozone?

Making the situation even more uncertain for this poor cousin in the 19-country eurozone is the recent transformation in power with the left-wing Syriza party, under Prime Minister Alexis Tsipras, assuming control. The problem for the stability of the eurozone is that Tsipras’ party won on a platform to revise the country’s previous bailout requirements.

Greece wants to alter the austerity demands set by the previous government and lenders. Of course, the eurozone is refusing to do so and expects Greece to honor its original deal.

One of the revisions Greece wants is a cut in the country’s budget surplus to 1.5% of gross domestic product (GDP), rather than the set three percent. Simply put, Greece wants to spend more, which would impact the debt obligations to the eurozone.

Things like bringing back pensions, increasing wages, and other spending is clearly not what the eurozone wants Greece to do. The eurozone realizes that a steady return to lowering spending and debt in Greece is the way to reform and potentially strengthen the region.

Greece faces a big debt repayment this summer and all signs point to a refusal to play. This Greek drama could get messier, with … Read More


My Economic Outlook for 2015: New Year Resetting for Fresh Stock Market Gains

By for Daily Gains Letter | Jan 5, 2015

Economic Outlook for 20152014 Recap: What Will Affect the Economy in 2015

Looking back on 2014, despite the elimination of quantitative easing and the pending rise in interest rates by the Federal Reserve, it’s clear that the bulls controlled the stock market.

In early December, things were looking rough. Stocks were threatening to move lower as the market focused on the economic stalling in China, Japan, and Europe, along with the political and economic turmoil in Russia that could kill the economic renewal in the eurozone and the global economy.

However, a positive that sets up well for 2015 is the renewed positive bias that emerged and drove the DOW and S&P 500 to new record-highs. The blue chips were sizzling in late December as the DOW easily blew above the 18,000 level for the first time on December 23. Blue chips closed up 7.5%, which was a big improvement over a month earlier.

In my estimation, the buying sets up well for the New Year as financial credit remains relatively easy and flowing, and the comparative yields on bonds are way too low to shift capital. Buying 10-year bonds yielding little more than two percent is not enticing for investors who have been seeing above-average gains since 2008.

The country continues to produce jobs at a rate of more than 200,000 per month in 11 of the 12 months in 2014. I expect this to continue into 2015. Excessive growth and downward pressure in the unemployment rate could drive the Fed to look at increasing rates earlier.

Oil continues to hold at the $50.00 range, but it could move lower. Saudi Arabia, … Read More


Early Preview: My Stock Market Outlook for 2015

By for Daily Gains Letter | Dec 17, 2014

Sneak Preview Stock Market Outlook 2015I will be formulating my complete stock market outlook for 2015 in a couple weeks, but at this time, I’m feeling somewhat uneasy. This year has turned out to be what I was expecting back in January 2014, with stock market trading being characterized by uncertainty and hurdles.

Small-cap stocks are heading for their worst performance since 2011, when the Russell 2000 fell just below six percent. The index is languishing, with a loss of one percent after the nasty down week we just experienced.

The selling was, in my view, somewhat driven by panic selling and capitulation. It gave stock market investors reasons to dump positions and take profits prior to year-end. The selling last week managed to wipe out five weeks of stock market gains for the DOW and the S&P 500.

The price charts are currently displaying an uneasy picture of the stock market. The DOW and S&P 500 have almost declined to their 50-day moving averages (MAs), which will each be a key technical point to watch. The Russell 2000 could take out its 200-day MA, based on my technical analysis.

Russel 2000 Small Cap index

Chart courtesy of www.StockCharts.com

The big risk is the failure to hold at the key moving averages, which, as I mentioned, could result in additional downside moves due to the lack of strong technical support until we hit the 200-day MA.

What the stock market needs is for the slide in oil prices to halt at the current $57.00 for West Texas Intermediate (WTI) oil as of Monday. The historically higher-priced Brent oil from the North Sea managed to recover to $60.00 after declining below … Read More