News Updates

For week ending December 27,2013

Stocks ticked higher over the course of the week with the S&P 500 and the Dow closing at new record highs amid optimism over the economic recovery.

New home sales fell 2.1% to 464,000.

Fixed Income

Two-Year High The yield on 10-year Treasuries reached the highest level in more than two years (approximately 3%) as signs of a quickening recovery boosted speculation the Fed will keep reducing debt purchases. Bond yields were pushed up on a steeper-than-forecast decline in the latest weekly filings for jobless benefits. Investors took it as the latest evidence the U.S. economy continues to slowly gain steam, improving the case for the Fed’s decision to start cutting back its bond buying next month, thereby reducing support for the bond market. "The bond market will be fine if the rise in yields is orderly and slowly rising, with limited inflation," said Kevin Giddis, head of fixed income at Raymond James in Memphis, Tenn. "The problems begin when you combine velocity and a spike in consumer prices." (Source: The Wall Street Journal)

Innovation and Transformation

Mobile traffic and sales surged on Christmas day 2013 with sales up 16.5% over the same period last year. Mobile traffic was the highest seen over this holiday season, accounting for 48% of all online traffic, up 28.3% compared to the same period last year. Mobile sales also remained strong, approaching 29% of all online sales, up 40% over 2012. Smartphones drove 28.5% of all online traffic compared to tablets at 18.1%, making it the browsing device of choice. As a percentage of total online sales, iOS was more than five times higher than Android, driving 23% vs. 4.6% for Android. On average, iOS users spent $93.94 per order, nearly twice that of Android users, who spent $48.10 per order. Shoppers referred from Facebook averaged $72.01 per order, versus Pinterest referrals, which drove $86.83 per order. However, Facebook referrals converted sales at nearly four times the rate of Pinterest referrals, perhaps indicating stronger confidence in network recommendations. (Source IBM Digital Analytics Benchmark)

Great American Companies

Apple says it has signed a deal to sell its iPhone through the world’s largest mobile carrier China Mobile, which has 763 million subscribers. The deal is expected to help Apple reignite its sales growth, which has slowed over the last year. "Apple has had the Wall Street monkey on their back to show growth, either expanding their current products via distribution or via a new category product like a watch or TV," said Patrick Moorhead, an analyst at Moor Insights & Strategy. "The China Mobile deal is huge for Apple because it provides what they've never had: broad distribution in China with the country's largest carrier.” The deal also promises to deepen Apple's complex relationship with a population that has been key to its success over the last decade. Apple has transformed itself partly by moving most of its product manufacturing to third-party companies based in China. (Source: Los Angeles Times)

 

Muni Bonds

October 17, 2013 posted by John


In the last weeks of June, the “sleepy asset class” of municipal bonds woke with a start and experienced the biggest three-day increase in yields since the late 1980s. For muni investors who had been calmed by the year's earlier market conditions, the onset of volatility was rather shocking—especially because it was triggered by seemingly benign comments from the Federal Reserve. Even as Federal Reserve Chairman Ben S. Bernanke worried out loud that people might draw the “wrong conclusion” from the Fed’s comments about maintaining quantitative easing and keeping the Fed Funds rate at current low rates, a sell-off had begun in the municipal bond market. The markets calmed down a bit when other Fed officials spoke about the disconnect they saw between what the Fed said and what investors heard. However, the result was a second consecutive quarter of declining prices in the municipal bond market. In light of these developments, we everyone to take a fresh look at your personal financial objectives. Those who still seek to collect yields that are exempt from federal, state and, in some instances, local income taxes should not let the market conditions of late June keep them from considering the positive aspects of the muni market in the second quarter: Strong fundamentals with most issuers making scheduled payments on time and in full The market has remained liquid and the default rate on muni bonds remains extraordinary low compared to historic levels of corporate bond defaults State tax revenues extended their growth streak to 13 quarters, including the preliminary data for the first quarter of 2013. Budgeting cycles seem less contentious Puerto Rico continues to strengthen its economic conditions Supply remains tight, and just a few trouble spots exist The thing we’re most focused on, as usual, is tax-free yield. Hard as it was to see prices decline so rapidly at the end of this quarter, we’re optimistic about the kinds of investing opportunities that the muni market of the third quarter will provide.

Volatility

June 27, 2013 posted by John


Over the past couple of weeks there has been an increased number of articles and news stories pertaining to a rise in volatility within the equity market.

This attention prompted us to update a study that we had done in the past regarding volatility, and in particular one that looks at the greater than 1% (+ or -) days for the Dow Jones Industrial Average [DJIA]. In other words, we look at the number of times that the DJIA has moved up or down in price by greater than 1%, a sign of increased volatility.

We present this information in two different ways. The first table displays a scatter plot of the trading days for 2013, and records the % gain or loss for the day. Those plots shaded "red" were days when the market was up or down at least 1%. Notice there have only been 11 days so far in 2013 that have produced such a move (only one day has produced a move greater than 2%). While more than one-third of those days have come in the last few weeks, explaining why it feels like volatility is on the rise, if we were to annualize 2013's data we would be comfortably within the neighborhood of "normal" with regard to 1% (+/-) days this year.

As the second table below shows, our annualized rate of 24 "1%" days in 2013 places the year very much in the lower echelon of history. By contrast, it was the levels seen in 2008, 2009, and 2011 that actually rank among the all-time most volatile years on record, behind only the early 1930's by this measure.

Twinkies

January 17, 2013 posted by Andrew White


It has been an exciting past few months. We have survived the Mayan Apocalypse, the fiscal cliff, and our Aunt Betty's holiday fruitcake.


But here at the office we have been suffering through our own Apocalypse: the Twinkie-Apocalypse. With Hostess now closed we haven't seen any at the local Price Chopper in a while. John has been thinking about smuggling them in from Canada where they are still being made by a company called Vachon Inc.


But a light is on the horizon, Mexican company, Grupo Bimbo, is in talks to buy Hostess' now defunct brands. So we might get our beloved snack back.  Although if we don't get any we may stick to our new years resolutions.

 

 

Capital Education Courses

November,12 2012 posted by Andrew White


Education is important to us. That is why it is in our name- Capital Education Network. We are in the process of setting up a number of courses for next spring that you can attend in various places around the Capital District. We want some input from you as to what you would like to learn. If you could take the time to fill out the form below it would help us put together better course for you. And thank you in advance

Legend of the Jack-o'Lantern

October 25, 2012 posted by John Gattulli


Halloween is one of the oldest holidays with origins going back thousands of years. The current version is based on holidays of several cultures over the centuries—the Roman’s Pomona Day, the Celtic festival of Samhain, and the Christian holidays of All Saints and All Souls Days.

One of the popular symbols of Halloween is the pumpkin. The pumpkin is an orange-colored squash, and orange has become one of the traditional Halloween colors (black being the other).

Carving pumpkins into jack-o’-lanterns is a Halloween custom dating back to Ireland. A legend grew up about a man named Jack who was so stingy that he was not allowed into heaven when he died, because he was a miser. He couldn’t enter hell either because he had played jokes on the devil. As a result, Jack was sent off into the dark night with only a lantern to light his way while he roams the Earth until Judgment Day. The Irish people carved scary faces out of turnips, beets, or potatoes representing “Jack of the Lantern,” or jack-o’-lantern.

When the Irish brought their customs to the United States, they carved faces on pumpkins because in the autumn they were more plentiful than turnips. Today, jack-o’-lanterns in the windows of a house on Halloween night typically let costumed children know that there are goodies waiting if they knock and say “Trick or Treat!”

Here’s a fun fact. Did you know that the United States produces over 900 million pounds of pumpkins per year for Halloween? Illinois is the largest producer, growing an average of 457 million pounds. That’s a lot of jack-o’-lanterns and pumpkin pies!

 

IRS releases 2013 IRA limits

October 22, 2012 posted by John Gattulli


The Internal Revenue Service has announced the following contribution limits for IRAs for the 2013 tax year.

 

401k contributions
  • Increased to $17,500
  • Catch-up contributions stayed the same at $5,500

 

IRA contributions
  • Roth: Increased to $5,500
  • Traditional: Increased to $5,500
  • Catch-up: Stayed the same at $1,000

Traditional IRA deductibility

  MAGI range
Single filers covered by employer plan $59,000 to $69,000
Married couples filing jointly, contributor covered by employer plan $95,000 to $115,000
Joint filer/with spouse covered by employer plan 1 $178,000 to $188,000

1 Must be under age 70.5. Must have earned income.

 

Roth IRA eligibility

  MAGI range
Single filers $112,000 to $127,000
Married couples filing jointly $178,000 to $188,000

 

SEP IRA contributions

  • Company may contribute up to 25% of compensation or $51,000, whichever is less
  • Compensation limit is 20% for sole proprietors

 

SIMPLE IRA contributions

  • Salary deferral up to $12,000
  • $2,500 catch-up contribution if age 50 or older
  • Employer match (up to 3%) or nonelective contribution (2%)

 

Changes bring opportunity Contact us to so that we can help you better understand what these changes mean for you.

 

The information presented is general in nature and should not be considered legal or tax advice. You should consult your legal or tax advisor for information concerning your own specific tax situation.

 

How Charting X’s and O’s Can Guide Your Investment Accounts

October 12, 2012 posted by Andrew


John was asked to facilitate two courses as part of as part of Hudson Valley Community College's Community and Professional Education Program.

John will be presenting Point and Figure charting, the method that he uses to guide his investments. Point and figure charting examines the forces of supply and demand within the stock market to see how that will affect prices. These forces work just like how supply and demand work to change prices at the supermarket. By examining these forces you can put together a comprehensive picture of what the stock market is doing- which makes knowing how to use Point and Figure Charts an invaluable skill to have.

Courses are on the November 1st and November 8th at 6:30pm and will be held in the Administration Building 102. The cost to attend is $15.

For more information you can go to For more information you can go to the HVCC schedule of classes and to register you can call the Office of Community and Professional Education at (518) 629-7339 or you can do it online just search for 50225 in the box.

 

Hello World: Welcome to our new section for news

October 3, 2012 posted by Andrew


In 1974 Bell Labs issued an internal memo on programing in a language known as C which contained the simple program to print out the words "hello world". C has since become one of the most popular programing languages in the world, and the program hello world has become one of the first programs one learns when learning a new programing language.

It is with Hello World that we will start things off here. Welcome to our new section for news. We will be posting updates about what is going on at the office, news about events and seminars that we host on a monthly basis, and news about the economy. We hope you check back here often, and find the things we post interesting and enlightening.

Returning visitors may have noticed that this is not the only change to the CapEdNet website recently. The entire site has gotten a face lift - it has been redesigned so that it is cleaner and easier to navigated so you can find information better. We hope you like it, and find it useful.

For those of you who don't know me, I am Andrew White, just started at Capital Education Network recently. I will be helping John out and doing projects like this one. Feel free to get in touch with me - my email is awhite@ae.cadaretgrant.com or call the office.