Daily Gains Letter

Global Economy

Global Economy Forecast for year 2014

By taking the economic conditions of all of the countries into consideration, we can get a clear picture of the global economy.  Understanding the global economy and the shifts among countries allows businesses to better allocate capital to geographic regions that are experiencing growth.

Currently, the U.S. is the largest economy in the world, followed by China. Shifts among countries in their global economic ranking are the result of many criteria, including population growth and fiscal and monetary policies. Knowing which part of the world is growing economically and which part is shrinking is extremely important for businesses.


What I’d Consider Buying as the Market Moves Higher Again



Consider Buying as the Market Moves HigherThe stock market appears anxious to move higher to new record highs. In the past week, the Federal Reserve released its Federal Open Market Committee (FOMC) meeting minutes that suggested it wanted to see stronger, sustained growth before deciding on when to raise interest rates. This includes both economic growth and jobs creation. On Thursday, the Bureau of Economic Analysis (BEA) will report the second reading of the second-quarter gross domestic product (GDP), which came in at a surprising ... Read More



Trouble in the Global Economy? (McDonald’s, Wal-Mart Say So)



Trouble in the Global EconomyThink all is well—or at least OK—with the global economy? Don’t relax too much, as that doesn’t seem to be the case. As we all know, spending drives economic growth, whether it’s from consumers, businesses, investments, or governments. Without one part or another, there would be added pressure on other areas. The United States recently saw a strong advance second-quarter gross domestic product (GDP) growth reading that pointed to relatively strong economic growth. But there are other signs that suggest otherwise. Where I like to look is to the major multinationals and the spending on their goods in the ... Read More



How to Play the Strong GDP Growth



Strong GDP Growth Suggests a Move to BondsOn one hand, it’s great the economic growth is showing renewed progress as the advance reading of the second-quarter gross domestic product (GDP) growth came in at an annualized four percent, according to the Bureau of Economic Analysis. (Source: Bureau of Economic Analysis web site, July 30, 2014.) Now I realize this is only the advance reading and things can change over the next few weeks as more credible estimates come into play, but I’m sure the Federal Reserve is keeping close tabs on the numbers. Investors are also likely quite nervous. It appears that the weak showing in the ... Read More



Why This Company Will Fare Well as the Economy Stutters



My Investment Solution for Tight TimesIf you think Americans are firmly comfortable in the economy and jobs, think again. Yes, the stock market has returned strong gains and has been an investment opportunity over the past five years (since the end of the Great Recession in 2008), but much of it was artificially driven by the lax monetary policy put forth by the Federal Reserve. Now that the quantitative easing is dissipating and interest rates are set to edge higher sometime in mid-2015, I’m not all that comfortable. The jobs numbers are improving, but they are still well below the 500,000 per month that some pundits deemed ... Read More



What the World Cup and the Stock Market Have in Common This Year



How to Make Some Premium Income This SummerLast Wednesday, I had fun watching the World Cup game between Argentina and the Netherlands. As strange as it may sound, I actually found that the tension and apprehension throughout the match reminded me of the stock market. Despite the Dow Jones Industrial Average recently trading above 17,000 and the S&P 500 at another record-high, I still sense the stock market is vulnerable to selling. I think this will be especially true if the second-quarter earnings season pans out as expected, devoid of any major growth in earnings or revenues. Alcoa Inc. (NYSE/AA) offered up a nice report, ... Read More



Did U.S. National Soccer Coach Jurgen Klinsmann Cost U.S. Economy $50.0 Billion?



Jurgen Klinsmann Brings U.S. Economy to a Screeching HaltJune 26 was a big day in U.S. soccer. Not just because we faced the Germans in a World Cup match that determined (in a roundabout way) whether or not we made it to the knockout round, but because Jurgen Klinsmann, the head coach of the U.S. men’s national team, gave every single employed American permission to take the day off work! Letter of Jurgen Klinsmann for US vs Germany Game Read More



Six Ways to Profit from Russia’s Geopolitical Posturing



Profitable Investment Opportunities for American InvestorsThe situation in Crimea should be closely monitored as it pertains to Europe and the eurozone. Russia is a major trading partner with the eurozone as well, supplying about 40% of the energy requirements in the area. That is why an escalation in Crimea could devastate the region, especially at a time when the economy is finally growing in the eurozone. I’m carefully watching the stand-off in Crimea and, more importantly, what Russia is doing. Whether it’s simply geopolitical posturing or a plan to enter into Crimea is unclear. The Russians really don’t want a ... Read More



How to Protect Your Portfolio and Profit as Interest Rates Rise



Interest RatesAccording to data released by the U.S. Bureau of Labor Statistics (BLS) last Friday, the unemployment rate stood at 6.7% in March, which is similar to the unemployment rate in February. A total of 192,000 jobs were added, of which food and drinking places added more than 30,000 and “temporary” help services in the professional and business industry added more than 29,000 jobs. The labor market fell slightly short of expectations as analysts had forecasted the unemployment rate to be 6.6% for March. (Source: “The Employment Situation — March 2014,” Bureau of Labor Statistics web site, April 4, 2014.) The Fed announced it would start to scale back its monetary stimulus last December, after jobs numbers started to ... Read More



Consumer Spending Growth in February Bad Sign for Investors?



Consumer Spending GrowthThe United States Census Bureau reported consumer spending in the U.S. economy—adjusted for price fluctuation—increased by 0.2% in February from the previous month. In January, consumer spending increased by 0.1% after seeing a decline in December. (Source: “Personal Income and Outlays, February 2014,” United States Census Bureau web site, March 28, 2014.) This sent a wave of optimism through the markets. We heard consumer spending is going higher; therefore, the U.S. economy will improve. Buy and buy some more, or you will miss out on future gains was what we were told. However, I don ... Read More



How to Profit from ECB’s Attempts to End Economic Slowdown



Economic SlowdownRemember what happened in the U.S. economy when the financial system was about to collapse? The banks weren’t lending to each other, businesses, or even consumers. The U.S. economy was in a deep economic slowdown. Investment banks like the Lehman Brothers had already collapsed and more would follow. Something had to be done or else it would be a disaster situation. When all of this was happening, the Federal Reserve stepped in to save the U.S. economy. It started to use a monetary policy tool called quantitative easing. The idea was simple: print money out of thin air and then buy back bad debt from the ba ... Read More



Depressed Copper Prices Presenting Perfect Buy-Low, Sell-High Opportunity?



Copper Prices PresentingBy now, you have probably noticed one phenomenon: the speculations regarding China’s growth are increasing each day. Turning on the TV or flipping through the pages of the newspaper, you’ll likely hear and read all about how the second-biggest economic hub in the global economy will tumble. No doubt, the arguments backing this argument are very credible. The Chinese economy is seeing an economic slowdown and troubles in that country continue to gain strength. For example, the Chinese manufacturing sector is stalling. In March, the HSBC Flash China Manufacturing Purchasing Mangers’ Index (PMI) declined to its lowest level in eight months. The output index declined to an ... Read More



How to Profit from This Declining Currency



Declining CurrencyProblems in the Canadian economy are growing and whispers of an economic slowdown are looming in the air. If an economic slowdown does occur, the Canadian dollar will be the primary victim—and investors can profit heavily from this scenario. The central bank of the country isn’t very optimistic about the growth. Commenting on the country’s first-quarter growth, the governor of the Bank of Canada, Stephen Poloz, said, “What we have seen is that the numbers in the first quarter have been a little shy of what we were expecting.” He added, “It’s easy to point to the weather as a qualitative explain ... Read More



Sin Stocks Posting Impressive Gains in Struggling U.S. Economy



Why Sin Stocks Are Where the Money Is in This Stock MarketAs the investing adage of the day goes, “When the going gets tough, the tough get eating, smoking, and drinking.” And there’s plenty of tough economic data out there to send people into the arms of their favorite vices and sin stocks. In a nutshell, U.S. unemployment has improved year-over-year to 6.7%, but the improved numbers are the result of an increase in low-wage-paying part-time retail jobs. The underemployment rate remains high near 13%, as does the long-term unemployed at 2.3%. And despite the soaring S&P 500, wages haven’t really budged in y ... Read More



How to Profit from China’s Economic Slowdown



China’s Economic SlowdownThere’s a significant amount of pessimism towards the Chinese economy these days, and the reasons behind this are very understandable. The economic data suggests the country is headed toward an economic slowdown. In 2013, China’s gross domestic product (GDP) grew by 7.7%—barely better than the previous year and the estimates that were calling for the lowest growth rate since 1999. (Source: Yao, K. and Wang, A., “China’s 2013 economic growth dodges 14-year low but further slowing seen,” Reuters, January 20, 2014.) Keep in mind that despite beating the estimates, this GDP growth rate is much lowe ... 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