Posts Tagged ‘silver’
The stock market came off its worst week this year; but even given the minor correction, I don’t think we can relax enough to re-enter the market and buy, based on my stock analysis.
I think there could be a more significant market correction down the road that could shave another five percent off the current levels.
Yet even so, the selling over the recent sessions have driven the key stock indices down to levels that are more realistic compared to levels at the end of the first quarter, according to my stock analysis.
Simply put, the previous rate of the advance was not sustainable.
My stock analysis shows that with April coming to an end, we could also be seeing the final leg of the current six-month bull cycle from November to April that has historically resulted in the best gains, according to the Stock Trader’s Almanac.
This doesn’t mean that stocks are not worth a look for the next six months. But if the historical cycles pan out, the best gains may have already been made, so it will come down to stock selection, according to my stock analysis.
Let’s take a look at the investment climate at this juncture.
What’s critical right now is the first-quarter earnings season. So far, with about 104 S&P 500 companies having reported, the results have more or less been in line with the previous quarters, with about 67.3% beating earnings-per-share (EPS) estimates, according to Thomson Financial.
Another 170 S&P 500 companies are reporting this week.
Of the 20% of the S&P 500 companies that have reported, the results … Read More
This morning the Bureau of Labor Statistics (BLS) reported there were only 88,000 jobs added to the U.S. jobs market last month. This will certainly give the politicians more bragging rights: the unemployment rate in the U.S. economy decreased to 7.6% in March, down from 7.7% in February. (Source: Bureau of Labor Statistics, April 5, 2013.)
As I always say, the devil resides in the details. The anemic jobs numbers report today showed, once again, how tormented the U.S. economy really is. In the month of March, the civilian labor force declined by almost 500,000 people!
Problems in the U.S. jobs market still persist. The number of Americans unemployed for more than six months hasn’t improved. They still make up almost 40% of the unemployed in the U.S. economy. Keep in mind; the longer they stay out of work, the harder it will be for them to get back into the jobs market, as they lose their skills.
The underemployment rate, a measure I consider to be a good indicator of the jobs market, still hasn’t shown any major improvements. In March, it stood just under 14%, compared to 14.3% in February.
March’s jobs market report is worrisome to say the least. Over the past 12-month period, on average, the U.S. economy has seen 169,000 jobs added each month. With only 88,000 jobs added last month, March’s jobs created were 48% below the 12-month average!
If you take out stock buyback programs, companies in key stock indices are struggling with profit growth. And I believe they have no other option than to cut their labor forces to maintain profits.
We … Read More
According to the U.S. Commodity Futures Trading Commission, the amount of bearish bets is inching closer to bullish bets on silver for the first time since 2007. (Source: Wall Street Journal, April 2, 2013.) This means that the number of investors turning bearish on silver prices is increasing. From trading just above $30.00 at the beginning of 2013, silver prices have declined below $27.00, or by 10%.
But what holds true is that just like gold bullion, the fundamentals behind silver prices are strong as well.
In a report issued by GFMS Thomson Reuters and commissioned by the Silver Institute in November of 2012, average industrial demand for silver in 2000 was 383.3 million ounces (Moz). By 2008, this number increased to 492.7 Moz. In spite of the deep downturn in the U.S. economy and global uncertainty, silver industrial demand reached new heights by 2010—499.6 Moz. For the years 2012 to 2014, GFMS Thomson Reuters estimates the average silver industrial demand to be around 483.3 Moz per year. (Source: “The Outlook for Silver Industrial Demand,” GFMS Thomson Reuters, November 2012.)
From the supply side, silver production hasn’t increased as much as the demand. The U.S. Geological Survey reported that, in 2011, worldwide silver mine production was 23,300 tons, or 821.8 Moz. By 2012, silver mine production only increased by little more than three percent. (Source: “Mineral Commodity Summaries,” U.S. Geological Survey, January 2013.)
Now bring in the investment demand (which I believe will … Read More
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