Daily Gains Letter

Economic Analysis

Economic Analysis for 2014

Economic Analysis takes place when an investor evaluates economic conditions through a logical and systematic approach. This type of analysis is done in order to find the underlying trends and investment opportunities. When an economist looks at the state of the economy, they might consider GDP growth, inflation, interest rates, major political events, unemployment, and consumer demand.

An economic analysis can help investors get a general idea of upcoming market conditions and a possible trend reversal.


Investors Beware: U.S. Not Immune to Stalling in Global Economy



U.S. Not Immune to Stalling in Global EconomyThe U.S. economy has been showing some positive growth that has helped to propel the stock market higher, but be careful: there appears to be some cracks forming in the global economy to which the U.S. economy will not be immune. Japan reported that its economy fell back into a recession after contracting an annualized 1.6% in the third quarter, representing the second straight quarter of contraction. Part of the blame will squarely lie with Prime Minister Abe and his controversial decision to raise the country’s sales tax from five percent to eight percent in April. I consider the decision to raise the sales tax wrong, as it largely impacts the middle cla ... Read More



What China-Japan APEC Talks Could Mean for Investors



China-Japan APEC Talks Could Mean for InvestorsThe annual Asia-Pacific Economic Cooperation (APEC) summit started on Monday in Beijing, and I bet there will be a lot of discussion on the state of China and Asia in the global economy. My readers all know the impact of China on the global economy, as I’ve written on its relevance before. If China fails, so will the global economy, including the United States and the fragile eurozone. Russia is already looking to extend its economic ties beyond the Great Wall. Yet it’s clear the country that gave us spectacular double-digit gross domestic product (GDP) growth for years is now strugglin ... Read More



My New Strategy for China’s Slowing GDP Growth



China’s Slowing GDP GrowthAs many of my long-time readers may already know, I have been bullish on China and Chinese stocks for some time. However, I’m now thinking that there could be some growth issues forming in the shadows—but that doesn’t mean there isn’t an opportunity to profit. We have been seeing some obvious signs surfacing that suggest China’s economy is stalling, but we really don’t know the true underlying gross domestic product (GDP) growth rate in the Chinese economy. According to the National Bureau of Statistics, China’s GDP grew at an annualized 7.3% in the third quarter, the slowest growth in five years and down from ... Read More



How to Play the Coming Eurozone Depression



Russia Sending Eurozone Back into a Depression How to ProfitIn 2013, when it was announced that the eurozone had emerged from its double-dip recession, the European stock market was optimistic and drove stocks higher. Yet there was a sense the route to higher gross domestic product (GDP) growth was not clear due to the massive debt still on the books of many of the eurozone’s weakest members, widely known as the PIIGS nations (Portugal, Ireland, Italy, Greece, and Spain). Yes, the countries have shown some recovery, but they continue to be plagued by massive debt and abnormally high unemployment. Unemployment acros ... Read More



Interest Rates: Why They’re Not Headed Up Anytime Soon



Fed’s Plans for Interest Rates Could Be Investing AdviceThe Federal Reserve has spoken and to no one’s surprise, there was really nothing new from Fed Chair Janet Yellen, who did as was expected after shaving off another $10.0 billion in monthly bond purchases. The Federal Reserve will cut the remaining $15.0 billion in October, bringing its third round of quantitative easing (QE3) to an end. What the stock market here and around the world also heard was that the Federal Reserve will likely maintain ... Read More



This Sector the Only Bright Spot in October Retail Sales



October Retail SalesOctober U.S. retail sector sales numbers are in, but are they worth getting excited about? The Census Bureau announced on Wednesday that October retail sector sales increased 0.4% month-over-month and 3.9% year-over-year to $428.1 billion. From a shorter-term perspective, the 0.4% increase really isn’t anything to get excited about; that 3.9% year-over-year increase, though, looks pretty good. (Source: “Advance Monthly Sales for Retail and Food Services October 2013,” U.S. Census Bureau web site, November 20, 2013.) Or does it? Take a step back, and you ... Read More



If It Looks Like a Bubble and Acts Like a Bubble…



Looks Like a BubbleMaybe I’m reading into the economy too much, but the current state of the U.S. economy and Wall Street isn’t adding up. The vast majority of people don’t think we’re in a bubble, including Federal Reserve chair nominee Janet Yellen. Granted, you can only really point to a bubble in retrospect, but still, it certainly looks and feels like we are in one. Talking before the Senate Banking Committee during her first public appearance as Federal Reserve chair nominee, Janet Yellen said she plans to keep p ... Read More