Jeff Voudrie’s Week-In-Review 10/08/2013

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In the markets:

September was an excellent month for US, Canadian and International markets.  US indices gained an average +4.4%, and both Developed and Emerging International gained more than +7%.  Canada trailed  other major markets with a gain of +1.3%.  In the US, SmallCap and MidCap indices led LargeCap, and Internationally, Developed led Emerging by a small margin.

In the US, September is historically the weakest month of the year for the stock market.  But when it is positive, the returns for the last two months of the year are usually quite good.  Since 1950, the 29 years with a positive September resulted in a 25-4 won-loss record for the following November-December period, averaging a gain of +4.1% for the final two months combined.

For the week, markets were mixed worldwide.  In the US, SmallCaps, MidCaps, and the Nasdaq gained less than a percent, while the S&P 500 and Dow 30 lost -0.1% and -1.2% respectively.  Canada’s TSX lost  -0.7% for the week.  Developed International lost less than -1% while Emerging International gained +2% on average

Although there was a dearth of economic data in the US, due to the government shutdown, a milestone of tremendous significance has been reached that has not received much notice.  A Wall Street Journal analysis of global data “shows that the U.S. is on track to pass Russia as the world’s largest producer of oil and gas combined this year – if it hasn’t already.  The U.S. produced the equivalent of about 22 million barrels a day of oil, natural gas and related fuels in July, according to figures from the US’s EIA and the International Energy Agency. Neither agency has data for Russia’s gas output this year, but Moscow’s forecast for 2013 oil-and-gas production works out to about 21.8 million barrels a day.” The US is closing in rapidly on energy independence, which seemed like just a pipedream only a few years ago.  (Saudi Arabia remains the world’s largest supplier of liquid crude oil alone, 11.7 million bar rels a day, according to the IEA. Russia was second at 10.8 and the U.S., third, at 10.3 million.)

The Eurozone manufacturing sector expanded for the third straight month in September, according to Markit surveys.  Growth was recorded throughout the third quarter of the year to lift the sector out of its long-running recession.  Things are even better in the UK:  the UK manufacturing sector continued to expand at a marked pace during September, to round off its strongest quarterly performance since the opening quarter of 2011, and now sits at a 27-month high. The UK labor market also showed further signs of improvement, as the rate of job creation climbed to a 28-month peak.

Markit also reported positive signals on the Eurozone jobs front as the rate of losses eased to a very modest pace, raising the possibility of employment starting to recover in the near future.

In China, the HSBC/Markit final Purchasing Managers Index (“PMI”) reading of manufacturing in China for September came in at 50.2, disappointing but still in positive (expansion) territory. The government’s PMI for manufacturing was 51.1 vs. 51.0 in August. The PMI for the service sector, as posted by the government, was a strong 55.4 in Sept. vs. 53.9 in August.  The Chinese government’s PMI readings concentrate on state-run enterprises, whereas the HSBC/Markit surveys heavily weight private enterprises.

(sources: Barrons, Wall St Journal, Bloomberg.com, ft.com, guggenheimpartners.com, ritholtz.com, markit.com, financialpost.com)

Looking ahead:
The government shut down has been getting a lot of news coverage and so has the impending debt ceiling crisis. Does anyone really believe that our government is going to default? In spite of the current administration trying to promote fear and panic, the markets are holding up relatively well. There are more ups and downs, but in the end we are in about the same place.

up and are recovering their losses from the May/June plunge. Still, I continue to believe that on a risk adjusted basis that equities should continue to out-perform between now and the end of the year.  There aren’t any changes in the asset allocation as of now but, as always, I will continue to closely monitor events and make dynamic adjustments as necessary.

Thank you for allowing me the privilege of working with you! Have a great week!

Author Bio:

A financial services industry veteran with more than 20 years’ experience, Jeff Voudrie is a new breed of private money manager. Using sophisticated electronic monitoring and software, combined with his 20 years’ experience as a money manager, Jeff works with you to create a personal investments management portfolio that reflects your lifestyle goals and risk tolerance. He specializes in stable growth and prudent profits while applying a robust, patented risk management processes. When you work with Jeff, you have the security of knowing that your life savings is getting the attention it deserves.

Jeff Voudrie, a financial planner in Johnson City, TN has been interviewed by The Wall Street Journal, CBS MarketWatch, The London Financial Times and the Christian Science Monitor. He is a former syndicated newspaper columnist and the author of two ground-breaking books: How Successful Investors Tripled the Return of the S&P 500 and Why Variable Annuities Don’t Work the Way You Think They Work. He accepts a limited number of new clients in his personal investments management practice. He and his wife Julie live with their seven children in Johnson City, TN. He is heavily involved in his local church and has done missionary work in Hungary and Cambodia.

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