Posted January 13th, 2012 at 10:35 America/New_York
Optimists and Skeptics in a Tug-of-War
News Brief from AXA Equitable: Highlights from recent notable market news reports
January 13, 2012
On the one hand, Bill Gross of Pimco says global markets and the economy are at risk in 2012, so he has been loading up on U.S. debt (“Pimco’s Gross Says Global Economy, Markets at Risk in 2012,” by Susanne Walker and Trish Regan, Jan. 12, 2012, Bloomberg).
On the other hand, Laszlo Birinyi, who correctly predicted the bull market would survive its 2011 mid-year correction, says the S&P 500 will gain at least 8 percent in 2012 as decent corporate profits force bears to capitulate (“Bull Market Defying Strategists Seen Continuing by Birinyi,” by Whitney Kisling, Jan. 10, 2012, Bloomberg).
“Many concerns are opinions, but not necessarily facts,” Birinyi of Birinyi Associates Inc. told Bloomberg. “Later in the year, things will get a little bit better and sentiment will change, and we end up at the last leg where we’ve got the last-guy-in-the-pool scenario.”
Gross is skeptical. “Banks should be eight-to-one or nine-to-one in terms of leverage,” he told Bloomberg. “Right now, the system is an 18-times to 20-times overleveraged system, and that’s producing the risk in terms of tipping one way or the other.”
“For the moment, the U.S. Treasury is viewed as a safe haven,” Gross said. “Until we see some clear evidence in terms of where the world is going, reflation or deflation, then that’s a decent alternative.”
In the middle of this tug-of-war stands Bob Doll of BlackRock Inc. (“BlackRock strategist Doll sees slow growth in 2012,” by Andrew Osterland, Jan. 10, 2012, InvestmentNews).
Doll is predicting 2.0 to 2.5 percent GDP growth and 1,350 for the S&P 500 by year end (which would be 7.3 percent higher than at year-end 2011), according to InvestmentNews. “Don’t get carried away with the recent good economic news,” he said. “The U.S. economy will muddle through but it won’t grow very rapidly.”
IMPORTANT — AXA Equitable, AXA Advisors, LLC (member SIPC) and their affiliates do not provide tax/legal advice, or investment or market research. The quotes provided in this News Brief have been excerpted from media reports for general informational purposes only and do not represent the opinions of AXA Equitable, AXA Advisors or their affiliates, associates or employees. AXA Equitable and its affiliates make no representation as to the accuracy or completeness of any statements, statistics, data, opinions, forecasts, or predictions provided herein, nor will this information necessarily be updated or supplemented at any time. Any reference to market or index performance is for informational purposes only. It is not possible to invest directly in an index. This material is not intended, and should not be relied upon, as investment or financial advice and does not constitute an offer or solicitation of any kind.
Posted January 10th, 2012 at 3:50 America/New_York
Napa Valley Voted Top Retirement Destination Choice
Napa Valley Welcome Sign, Photographed by Stan Shebs, September 2005
Napa Valley, CA is the preferred place to retire, according to the participants of AXA Equitable’s “Destination Retirement Sweepstakes.” AXA Equitable launched the sweepstakes to mark the retirement of its advertising campaign star − “the 800lb gorilla in the room.” The public was invited to enter the sweepstakes featured on Facebook and Twitter (@AXA_Equitable). Sweepstakes entrants chose from four places where the gorilla could retire and entered a contest to win a trip to the destination that received the most votes. Napa Valley was chosen above North Carolina, Puerto Rico and Florida.
Land of Plenty
By all accounts, Napa Valley is indeed a special place. The area’s original Wappa Indian inhabitants used their word “napa” to describe a “Land of Plenty.” Today, the official County of Napa website describes it as “America’s legendary wine, food and wellness destination…. one of the most rare and precious agricultural preserves on earth – a place that moves in perfect synchrony with the seasons.” A website called www.TopRetirements.com describes Napa as “an interesting retirement community for active adults who enjoy wine, a warm climate, and great restaurants.”
Reality Checklist: Retirement Relocation
While sweepstakes are fun and retirement should be too, relocating requires serious consideration, no matter what your life stage, whether you’re moving around the corner, across the country or around the world.
If you’re thinking about retiring to another state or country, there are social, medical, financial, and legal issues to consider. Retirement relocation has become an industry in itself, with many places vying for retirees with tax breaks and other perks. Services abound on the internet advising retirees on relocation. There’s even a magazine called “Where to Retire” self-described as “the authoritative source of useful information for the 700,000 Americans who move to new towns to retire every year.”
Before you load up the truck, do your research. Retirement isn’t a vacation. It takes long-term planning about things like healthcare quality and access, taxes, community, transportation and cultural offerings. To get started, U.S. News offers a checklist.
Once you’re ready, maybe you’ll decide to join the 800lb gorilla in Napa…
Posted January 6th, 2012 at 7:33 America/New_York
Wary Words on Stocks vs. Bonds in 2012
News Brief from AXA Equitable: Highlights from recent notable market news reports
January 6, 2012
Burton Malkiel, author of “A Random Walk Down Wall Street,” is recommending stocks over bonds for 2012, predicting a 7 percent yield on stocks vs. just 2% on the 10-year Treasury bond (“Where to Put Your Money in 2012,” by Burton G. Malkiel, Jan. 5, 2012, The Wall Street Journal), but not everyone is so sure.
Goldman Sachs’s David Kostin expects U.S. stocks will end 2012 no higher than at year-end 2011, which was no higher than year-end 2010 (“Street Wary on Its Random Walk,” by Steven Russolillo, Jan. 4, 2012, The Wall Street Journal). Morgan Stanley takes it one step further predicting the S&P 500 will end the year down 7%, citing slowing global growth, The Journal reported.
Adam Parker of Morgan Stanley told The Journal that the U.S. dollar’s strength against the euro is a strong signal for weaker earnings, adding, “We think the risk reward is skewed to the negative.”
Uri Landesman of Platinum Partners in Manhattan, told The Journal that while he expects the S&P will end the year higher, “I agree with the assessment that it’s going to be another very volatile year.”
Byron Wien of Blackstone Group sides with the optimists, writing in his annual “10 Surprises” list that oil will fall to $85 a barrel this year, the S&P will rise to 1,400, U.S. GDP will exceed 3 percent, and unemployment will drop below 8 percent (“Wien Sees Oil Falling to $85, S&P 500 Topping 1,400 in 2012,” by Lu Wang, Jan. 3, 2012, Bloomberg).
“The drop in the price of oil and the rise in the stock market improve both consumer confidence and spending patterns,” Wien wrote. “Recession fears and even ‘the new normal’ view of prolonged slow growth are called into question.”
Nevertheless, sentiment will surely play a role, and frustration and skepticism dominate as investors enter the new year (“World’s Woes Leave Lasting Scars,” by Tom Lauricella, Jan. 3, 2012, The Wall Street Journal).
“This dour demeanor comes after a year where many investors learned they had underestimated just how volatile and unpredictable life would be as the world’s major developed economies contend with a mountain of debt,” The Journal reported.
IMPORTANT — AXA Equitable, AXA Advisors, LLC (member SIPC) and their affiliates do not provide tax/legal advice, or investment or market research. The quotes provided in this News Brief have been excerpted from media reports for general informational purposes only and do not represent the opinions of AXA Equitable, AXA Advisors or their affiliates, associates or employees. AXA Equitable and its affiliates make no representation as to the accuracy or completeness of any statements, statistics, data, opinions, forecasts, or predictions provided herein, nor will this information necessarily be updated or supplemented at any time. Any reference to market or index performance is for informational purposes only. It is not possible to invest directly in an index. This material is not intended, and should not be relied upon, as investment or financial advice and does not constitute an offer or solicitation of any kind.
Posted December 30th, 2011 at 7:46 America/New_York
High Volatility, Low Returns: Now What?
News Brief from AXA Equitable: Highlights from recent notable market news reports
December 30, 2011
High volatility in stock prices – double the average over the past five decades – has coincided with the S&P 500 on track to notch its smallest year-end price change, around 1 percent, since 1970 when it inched down 0.1 percent (“S&P Volatility Double Average as Index Moves Least Since ’70,” by Inyoung Hwang and Alexis Xydias, Dec. 27, 2011, Bloomberg).
By a wide margin, the highest-returning stocks have been those of companies in the so-called defensive sectors – consumer staples, for example, that are less sensitive to economic trends – compared to economy-dependent sectors, Bloomberg reported. So is the glass half full or half empty?
“The combination of a very crowded trade and a market that’s very cheap with a lot of doubters suggests to me the place to put funds is in the market overall,” Andrew Slimmon of Morgan Stanley Smith Barney told Bloomberg.
The glass-half-empty crowd argues that the stock market now offers fewer buying opportunities because of the run-up in defensive sectors, Bloomberg notes, but as The Wall Street Journal reports, an economic recovery in the U.S. is hard to ignore as it generates increasingly positive signals (“Data Suggest Recovery Gaining Steam,” by Ben Casselman, Dec. 30, 2011, The Wall Street Journal).
The latest jobs, housing, and manufacturing statistics “suggest that the economic recovery is once again gaining momentum after nearly stalling out earlier this year,” The Journal reported, noting that recession anxiety peaked last summer but now is easing on signs of steady though still slow economic growth.
“We continue to hear people say that the U.S. recovery is fragile, and that’s the wrong word,” Michael Gapen, an economist with Barclays Capital, told The Journal. “It’s durable. It’s just not robust. It’s a moderate expansion.”
IMPORTANT – AXA Equitable, AXA Advisors, LLC (member SIPC) and their affiliates do not provide tax/legal advice, or investment or market research. The quotes provided in this News Brief have been excerpted from media reports for general informational purposes only and do not represent the opinions of AXA Equitable, AXA Advisors or their affiliates, associates or employees. AXA Equitable and its affiliates make no representation as to the accuracy or completeness of any statements, statistics, data, opinions, forecasts, or predictions provided herein, nor will this information necessarily be updated or supplemented at any time. Any reference to market or index performance is for informational purposes only. It is not possible to invest directly in an index. This material is not intended, and should not be relied upon, as investment or financial advice and does not constitute an offer or solicitation of any kind.
Posted December 23rd, 2011 at 8:23 America/New_York
Outlook in Four Words: Europe, Housing, Jobs, Politics
News Brief from AXA Equitable: Highlights from recent notable market news reports
December 23, 2011
Economists expect U.S. GDP will grow a modest 2% in 2012, only slightly higher than the 1.7% rate expected for 2011, citing issues related to Europe, housing, jobs, and government spending cuts (“Risks Cloud Outlook for Economy in 2012,” by Conor Dougherty, Dec. 23, 2011, The Wall Street Journal).
The Journal’s survey of economists found that most respondents expect a mild Europe recession to hurt U.S. exports, persistent foreclosures to depress home values, job growth to be too weak, and government spending cuts – and related political wrangling – to further drag down growth.
“We know the global economy is going to slow,” Nariman Behravesh of IHS Global Insight told The Journal. “The question is by how much.”
Mohamed El-Erian of Pimco paints an even gloomier picture (“Pimco’s El-Erian Sees Risk Europe May Spark Lehman-Like Crisis,” by Rich Miller, Dec. 20, 2011, Bloomberg).
El-Erian, head of the world’s biggest bond fund, told Bloomberg the euro zone has a 1 in 3 chance of breaking apart and sparking a 2008-style financial meltdown. “It would be the equivalent of a sudden stop” in which financial markets seized up, El-Erian said, adding that the more likely scenario is that the euro currency union slims down.
El-Erian said he thinks nine of the current 17 countries would remain in the union – Austria, Belgium, Finland, France, Germany, Italy, Luxembourg, the Netherlands and Spain.
IMPORTANT — AXA Equitable, AXA Advisors, LLC (member SIPC) and their affiliates do not provide tax/legal advice, or investment or market research. The quotes provided in this News Brief have been excerpted from media reports for general informational purposes only and do not represent the opinions of AXA Equitable, AXA Advisors or their affiliates, associates or employees. AXA Equitable and its affiliates make no representation as to the accuracy or completeness of any statements, statistics, data, opinions, forecasts, or predictions provided herein, nor will this information necessarily be updated or supplemented at any time. Any reference to market or index performance is for informational purposes only. It is not possible to invest directly in an index. This material is not intended, and should not be relied upon, as investment or financial advice and does not constitute an offer or solicitation of any kind.
The Source @ AXA Equitable
