The calendar tells us certain events took place in years past that may actually rhyme for this year, but the ingredients for a market decline are not there.
It's true. It's been more than 20 years since the last tax system overhaul. President Barack Obama says his mission now is to simplify - eliminate loopholes, deductions and many exemptions - in the current tax code within two years. As a prelude to that future massive undertaking, the House and Senate passed an $858-billion bill preventing across-the-board tax increases to millions of Americans until the end of 2012. "We are hopeful that the plan will help create jobs and provide stimulus to the economy," says Wealth Solutions Vice President Chip Bauder.
Many astute retailers didn't wait for Black Friday - traditionally, the biggest shopping day of the year. Instead, they "revved-up" their holiday deals on Thanksgiving Day.
No matter how much anyone makes, in 2010 investors saving for retirement will have an opportunity to convert traditional IRAs into Roth IRAs, paying no federal taxes on the transaction until 2011 and 2012.* Before 2010, anyone making $100,000 or more annually couldn't make such conversions. The advantages of the Roth IRA are well known. Because they are funded with after-tax dollars, qualified distributions are tax-free, although unless certain criteria are met, Roth owners must be 59 1/2 or older and have held the IRA for five years before tax-free withdrawals are permitted. As no withdrawals are actually required, high-net-worth individuals can pass untouched Roth accounts to future generations. Conversion isn't for everyone, including those who expect to be in a lower tax bracket or who would have to use other retirement funds to pay the tax, says Susan Hartman, CFP, a tax and estate planning consultant with the firm's Financial Planning Group, in this edition of Professionally Speaking, hosted by Larry Pugliese.
Retail analysts base a portion of their holiday shopping projections on back-to-school shopping, the second largest annual shopping event. And even though shoppers came out later than in previous years - partially due to the long, hot summer - there were plenty of overall savings, plentiful merchandise and substantial "denim deals," says Softline Retail Analyst Samantha Panella. Technology has changed the face of retail. Today, retailers have to understand their customers and be sharper to reach them online and offline with creative discounts and focusing their advertising dollars toward teens and their mothers. "While online shoppers have become more powerful in their search for bargains, it still comes down to a search for value," says Samantha in this edition of Professionally Speaking, hosted by Larry Pugliese.
There was a rush into fixed income after the collapse of Lehman Brothers. Many experts feel it was prudent at that particular time. Bonds serve their purpose for diversification, income generation and will return principal barring default. As a result, there's much-to-do today in the media about a bond "bubble" forming. But the concept of bubbles doesn't seem to relate to bonds as well. "A bond bubble is vastly different from an Internet bubble where you are betting on something appreciating ad infinitum," says Managing Director of Fixed Income for Eagle Asset Management James Camp. We know that bonds have finality to them. That's where prudent asset allocation comes in to "weather the storm" as a result of having a properly balanced portfolio. "Investors need to know what valuations look like and what sectors look attractive because they're not all equal at any point in time," James Camp says in this edition of Professionally Speaking.
As the Internet matures, so do iconic companies like Google, Amazon and eBay. Google recently commented that it expects its display market to grow from $20 billion to $50 billion in the next four to five years. "Competition doesn't seem to bother Google; they've been able to hold constant with search above a 60 percent query share in the United States," says Raymond James Communications and e-Commerce Software Analyst Shyam Patil. Amazon is the dominate leader in e-commerce. Experts have seen consumers initiate a general shift from offline to online shopping. There is significant upside to this company in North America. And eBay, which pioneered the auction format, has outlined a turnaround strategy for its marketplace business and is getting positive feedback. "It's probably best to take a wait-and-see how they do with that," says Shyam in this edition of Professionally Speaking, hosted by Larry Pugliese.
As the Internet matures, so do iconic companies like Google, Amazon and eBay. Google recently commented that it expects its display market to grow from $20 billion to $50 billion in the next four to five years. "Competition doesn't seem to bother Google; they've been able to hold constant with search above a 60 percent query share in the United States," says Raymond James Communications and e-Commerce Software Analyst Shyam Patil. Amazon is the dominate leader in e-commerce. Experts have seen consumers initiate a general shift from offline to online shopping. There is significant upside to this company in North America. And eBay, which pioneered the auction format, has outlined a turnaround strategy for its marketplace business and is getting positive feedback. "It's probably best to take a wait-and-see how they do with that," says Shyam in this edition of Professionally Speaking, hosted by Larry Pugliese.
There was a rush into fixed income after the collapse of Lehman Brothers. Many experts feel it was prudent at that particular time. Bonds serve their purpose for diversification, income generation and will return principal barring default. As a result, there's much-to-do today in the media about a bond "bubble" forming. But the concept of bubbles doesn't seem to relate to bonds as well. "A bond bubble is vastly different from an Internet bubble where you are betting on something appreciating ad infinitum," says Managing Director of Fixed Income for Eagle Asset Management James Camp. We know that bonds have finality to them. That's where prudent asset allocation comes in to "weather the storm" as a result of having a properly balanced portfolio. "Investors need to know what valuations look like and what sectors look attractive because they're not all equal at any point in time," James Camp says in this edition of Professionally Speaking.
Retail analysts base a portion of their holiday shopping projections on back-to-school shopping, the second largest annual shopping event. And even though shoppers came out later than in previous years - partially due to the long, hot summer - there were plenty of overall savings, plentiful merchandise and substantial "denim deals," says Softline Retail Analyst Samantha Panella. Technology has changed the face of retail. Today, retailers have to understand their customers and be sharper to reach them online and offline with creative discounts and focusing their advertising dollars toward teens and their mothers. "While online shoppers have become more powerful in their search for bargains, it still comes down to a search for value," says Samantha in this edition of Professionally Speaking, hosted by Larry Pugliese.
Aside from the infinitesimal risk inherent in eating fresh seafood at any time, there is no reason for diners to be concerned that the seafood on their plates contain oil-contaminated fish or shellfish. There is no commercial fishing or harvesting in spill-affected areas of the Gulf of Mexico. The public should know that up to 30% of seafood, including salmon and shrimp, is now farm-raised, and that there is broad diversity of supply. Aquaculture is an important industry in South America, Asia and parts of Africa. There is more than enough global supply that originates far from the BP spill area. The spill is a tragedy for many reasons, and especially for people who depend on the Gulf for their livelihoods - the oyster beds could be gone for a generation - but, broadly, it has no impact on the safety of seafood, and there is no reason to be concerned about the safety of restaurant or supermarket seafood, says Raymond James' Senior Restaurant Analyst Bryan Elliott in this edition of Professionally Speaking, hosted by Larry Pugliese.
We've moved fairly quickly from handheld flip phones, good for phone calls and texting, to newfangled little handheld computers - some with slide-out QWERTY keyboards - that can access the Internet, send high-definition videos and even facilitate video conferencing. Basically, everything you can do on a laptop, you can now do wirelessly on a smart phone. Apple's iPhone has been the runaway success during the past 2 1/2 years, and when it broadens its distribution beyond AT&T - maybe in the first half of 2011 - Verizon subscribers will be able to get their hands on it. Competitors haven't been idle. BlackBerry has revitalized its tired product, and Motorola and HTC have built smart phones based on Google's Android operating system, which runs Adobe Flash - and a lot of media-rich content is available only on Flash (which the iPhone doesn't support). Investors willing to tolerate considerable risk might try to capitalize on successful product cycles, remembering that this is a product-cycle-based manufacturing industry, says Raymond James' Director of Telecommunications Equipment Research Todd Koffman in this edition of Professionally Speaking, hosted by Larry Pugliese.
When the Bush tax cut measures sunset at the end of 2010, high-income earners - as defined by the current administration, individuals with adjusted gross incomes (AGI) of more than $200,000 and families with more than $250,000 - are likely to feel the greatest impact. If no changes are made, rates for the two highest brackets will rise from 33% and 36% to 36% and 39.6%, respectively, the capital gains rate will move from 15% to 20%, and dividend income may be treated as ordinary income. In addition, "stealth" taxes in the form of caps on the tax effectiveness of deductions for high-income earners may also be installed. Given the likelihood of these measures going into effect, it may benefit high-income taxpayers to accelerate deductions into the 2010 tax year. This is a challenging year - just the time to involve your financial and tax advisors to help determine what's right for you, says Raymond James' Wealth Solutions' Senior Vice President Chip Bauder in this edition of Professionally Speaking, hosted by Larry Pugliese.
Aside from the infinitesimal risk inherent in eating fresh seafood at any time, there is no reason for diners to be concerned that the seafood on their plates contain oil-contaminated fish or shellfish. There is no commercial fishing or harvesting in spill-affected areas of the Gulf of Mexico. The public should know that up to 30% of seafood, including salmon and shrimp, is now farm-raised, and that there is broad diversity of supply. Aquaculture is an important industry in South America, Asia and parts of Africa. There is more than enough global supply that originates far from the BP spill area. The spill is a tragedy for many reasons, and especially for people who depend on the Gulf for their livelihoods - the oyster beds could be gone for a generation - but, broadly, it has no impact on the safety of seafood, and there is no reason to be concerned about the safety of restaurant or supermarket seafood, says Raymond James' Senior Restaurant Analyst Bryan Elliott in this edition of Professionally Speaking, hosted by Larry Pugliese.
A recovering economy means more travelers this summer. With more than adequate oil inventories, the price of gasoline at the pump should be more or less the same as it has been during the past few months. If you're traveling by air, expect full airplanes and charges for checked baggage. Base airfares have risen, but there are deals available, especially if you're willing to travel on Tuesdays, Wednesdays and Saturdays. Good deals at hotels may be found in the less-traveled areas of the country. If you're up for a cruise, you'll still find some good deals, especially among regional promotions offered by the various cruise lines. Expect crowded ships and figure on paying up to 40% more for a window in your cabin. Overall, it's shaping up to be a reasonably good summer travel season, say Raymond James' sector analysts Marshall Adkins, Jim Parker, Bill Crow and Joe Hovorka in this edition of Professionally Speaking, hosted by Larry Pugliese.
Instant worldwide market reaction to the good or bad news of the day is typical of the current investment landscape, but there is much to be learned from the interconnectedness of global markets. It is no longer enough, for example, to think you have a diversified portfolio merely because you have exposure to both domestic and foreign stocks - they're the same asset class and they act that way. The economic turmoil in Greece may seem to be regionally specific, but, from a stock perspective, what happens overseas can very easily affect markets everywhere. To be truly diversified, the modern investor may want exposure to commodities, currencies, cash and interest rate markets. Investors can watch for market volatility by using the Volatility Index (VIX) as a guidepost. The index is a measurement of investor complacency and fear. When it starts low and moves up, it's telling you that fear is increasing - and that investors and traders are likely to start selling stocks - says Raymond James' Chief Market Technician Art Huprich in this edition of Professionally Speaking, hosted by Larry Pugliese.
In the financial press, it can read like a soap opera script - one day a European Union aid package for debt-laden Greece seems imminent; the next day, it's questionable. In truth, it's difficult to say how this is going to develop, though the chief concern is the threat of contagion - that similar economic problems could spread to Portugal and then to the larger European economies of Spain, Ireland and Italy. We're seeing something like a run on a bank. Speculators are betting the euro will fail, which is worrisome, because if they succeed in Greece, they could gang up on other nations. Investors in U.S. companies know that some American firms could be hurt by the euro's weakness. As the euro loses value and the dollar strengthens, U.S. exports become more expensive, while European exports are suddenly more competitive. Anxiety over the Greek situation and the fear that it could be contagious may be justified, but we don't know how serious it will be, says Raymond James' Chief Economist Scott Brown in this edition of Professionally Speaking, hosted by Larry Pugliese.
BP's aggressive response to the recent oil rig explosion in the Gulf of Mexico is bringing the company plaudits. The firm, which employed 30 ships and five aircraft to help limit the effects of the mishap, is taking measured steps to seal the oil leak. BP seems to have learned a lot from what was regarded as its much more sluggish response to an Alaska Pipeline spill in 2006. An accident of this type is an exceedingly rare event, but the reality is that the energy business can be a dangerous one. However, just as the recent coal mine disaster in West Virginia won't put an end to coal mining, the mishap in the Gulf, despite any immediate effects, is unlikely to affect off-shore drilling policies, says Pavel Molchanov, Raymond James' energy industry analyst, in this edition of Professionally Speaking, hosted by Larry Pugliese.
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