"Ever wonder about those people who spend $2 apiece on those little bottles of Evian water? Try spelling Evian backward."
~ George Carlin
The Professional Opinion
S&P 500 Index: 987.48
LEI - Leading Economic Index
The month of June makes for three out of three months where the LEI has improved. In Bob's view this is signaling a turnaround in the
second two quarters. He likes this particular index.
Industrial production declined by .4% in June, which was less than the 1.2% drop in May. It is also the smallest decline in eight months.
The Paradox of Thrift
The paradox of thrift says that people save money when times are bad and in doing so, prolong economic recovery because they are not
consuming. Less consuming means less manufacturing and fewer jobs.
Americans are saving for the first time in years. Consumer debt actually declined .7%, which is the first decline in the 57 years that this statistic has been tracked. There are numerous examples where consumers are going on the cheap to save money. Campbells Soup
has cited reduced demand for vegetable juices because consumers are drinking more tap water.
Oil remains a wild card because we have done nothing to get out from under the thumb of OPEC.
(Our energy policy consists of teleprompters tilting at windmills)
None in sight
Single family homes and condo resale climbed in June to 3.6%, which is the best monthly figure since last October. These resale
figures have risen for three straight months.
New home sales rose 11% in June, making that the third month in a row of increasing sales.
(As an aside, I notice DR Horton (DHI) is actually advertising on TV - decided to pick up some shares).
The cyclical bull market which Bob believes we are in remains intact. Buy on the dips. Buying an oil stock or two on price declines is a good way to hedge against higher energy prices going forward. Bob prefers oil companies located in North America and producing oil in North America. A good place to start looking is in the province of Alberta, CA.
Dusk over the Sierras