Holiday countdown
The chase by Frances Horodelski:
That was fun. But I’m over it. So can I please have my power back on? Now would be nice.
The power on Wall Street (and even Bay Street recently) has been pretty spectacular. As of this moment, the numbers for 2013 are Dow +24.35%, S&P +28.17%, Nasdaq +37.4% and TSX +8.16%. The TSX has underperformed the S&P for three years in a row. The S&P 500’s performance is the best since 1997 (which was followed by another two years of strong gains).
And the bulls are out. Here’s a comment from regular BNN guest Kevin Cook at Zacks: “My list of 5 forces hasn't changed since I first wrote of them in January: 1) Macro risk "off" (Europe, China, Washington)=Investing risk "on" (to the upside); 2) Economic growth is good enough and building momentum; 3) The Fed remains steadfastly on the side of pro-growth and reflation; 4) Corporations are producing record profits and balance sheets are strong; 5) Cash is still trash and fund managers MUST chase and compete for stocks. What exactly didn't 95% of hedge funds who got beat by Mr. Market this year not understand about these bullish drivers? When you combine these factors, you have the recipe for a huge "multiple-expansion rally." And when this game is on, like it was in the 1990's, you don't worry about a "fully-valued" market because the momentum is probably going to ‘over-valued.’ Bottom line: I am not worried about a bubble in equities. Sure, this will run too far ahead of the economy at some point and a correction will follow. But there will be little damage to the economy because the benefits from consumer confidence and the wealth effect far outweigh the excess a good correction might have to wring out.”
David Rosenberg published his 2014 report yesterday and it is titled “2014 – The Year of the Horse: The one that’s about to break out of the gate.” The year will be a surprise year like 1984, 1994 and 2004 and that the upside macro surprise shifts from the UK to the U.S. – and as previously, years ending is 4s, Rosenberg says, all fit the bill of economic acceleration.
On the news front, appropriately thin with Sherritt selling off its coal assets, KKR investing $250 million in Canada’s Torq Energy Logistics, retail survey company ShopperTrak reports retail sales for the week ending December 16 down 3.1% from the same period last year. Bricks and mortar traffic was down 21.2% and the last Saturday before Christmas (21/12/13) saw a 0.7% decline in sales and an 18.1% drop in traffic. GDP in China according to economists is expected to grow 7.4% in 2014 and officials are reported (Reuters) to be targeting 7.5% growth in 2014 (concerns had run rampant through the world that the target growth rate would be 7%).
So now is the time to relax and enjoy. Remember that family you might have ignored over the year (or the friends, and even the enemies) – take some time to get reacquainted. And while you’re at it, see a movie with them or share excerpts from a book. Do the big Globe & Mail holiday crossword as a family or a group of friends (very satisfying). Maybe just smile.
Movies I want to see over the holidays (in no particular order – except the first is the first):Inside Llewyn Davis, American Hustle, Nebraska, The Hobbit 2, The Wolf of Wall Street, The Secret Life of Walter Mitty, The Counselor, Her and Saving Mr. Banks. Did I miss any?
Best books of the year for me: Perfect (awesome story); currently reading The Goldfinch (also awesome); only book on the New York Times top 100 that I have read The Woman Upstairs. Books on my shelf that will be read shortly include The Luminaries and The Rosie Project. Oh, and in 2014, I just might re-read all ten books of The Dance to the Music of Time by Anthony Powell. Now that will keep me warm
Happy holidays.