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September 18 2015

The market is as streaky as a slice of bacon.

U.S. stock markets have been sliding higher. They’ve been sliding lower.
Barron’s reported the Standard & Poor’s 500 Index has tumbled from gains to losses and back again for 10 weeks in a row. The Dow Jones Industrial Index has tagged along with nine weeks of flip-flops. You’d almost think they were running for office.

There are market optimists. There are market pessimists.
The American Association of Individual Investors (AAII) weekly survey of investor sentiment reported 34.6 percent of respondents were bullish. That’s up from the previous week. Thirty-five percent of respondents were bearish. That’s also up from last week. What’s down? Neutral sentiment. More people are forming opinions about the possible direction of the market.

There are questions that need to be answered.
Will the Federal Reserve begin to raise rates this week? Some say yes. Some say no. Barron’s said it’s too close to call. There is no clear consensus, Fed officials have given mixed signals, and the bond market has not priced in a rate hike. If the Fed does raise rates, experts cited by Barron’s said markets could get ugly for a little while or they could remain calm. A lot depends on the wording of the Fed’s statement.

Have Chinese markets stabilized? MarketWatch reported the Shanghai Composite Index finished last week higher. It was the first positive weekly outcome in a month. Chinese authorities, once again, are taking steps to stabilize markets. The Economist offered this thought, “As China’s financial markets develop, its stock market will become less bumpy. For now, investors must remember that many things are bigger in China, including the daily ups and down of its stock market.”

Will the U.S. government shut down again? It’s in the hands of our elected officials.

Sources:
http://www.barrons.com/articles/u-s-stocks-rise-2-1-ahead-of-federal-reserve-meeting-1442036643?mod=BOL_hp_we_columns
http://www.aaii.com/sentimentsurvey
http://www.barrons.com/articles/barrons-fed-rate-hike-too-close-to-call-1442036635
http://www.marketwatch.com/story/asian-stocks-waver-ahead-of-fed-decision-2015-09-11

  • Data as of 9/11/151-WeekY-T-D1-Year3-Year5-Year10-Year
  • Standard & Poor’s 500 (Domestic Stocks)0.021-0.048-0.0180.110.1210.047
  • Dow Jones Global ex-U.S.1.8-7.2-14.11.70.81.2
  • 10-year Treasury Note (Yield Only)2.2NA2.51.72.84.2
  • Gold (per ounce)-1.6-8.3-11.4-14.1-2.49.4
  • Bloomberg Commodity Index0.5-14.8-26.9-15.7-8.3-6.1
  • DJ Equity All REIT Total Return Index2.2-70.27.210.86.3

*Indices are unmanaged and investors cannot invest directly in an index.
*Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
*S&P 500, Gold, Dow Jones Global ex-Us, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend).
*The DJ Equity All REIT Total Return Index does include reinvested dividends.
*All investments involve risk – coins and bullion are no exception. The value of bullion and coins is affected by many economic circumstances, including the current market price of bullion, the perceived scarcity of the coins and other factors. Therefore, because both bullion and coins can go down as well as up in value, investing in them may not be suitable for everyone. Since all investments, including bullion and coins, can decline in value, you should understand them well, and have adequate cash reserves and disposable income before considering a bullion or coin investment.

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Bart A Zandbergen, CFP® is a Registered Investment Advisor with Optivest, Inc and a Registered Representative with Gramercy Securities, Inc. Investment advisory services are offered by Optivest, Inc. under SEC Registration and securities are offered through Gramercy Securities, Inc., member FINRA & SIPC, 3949 Old Post Road, Charlestown, RI, 02813, 800-333-7450.

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