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Dec 15, 2013

2014: Battleground year for stocks vs. commodities by Myra P. Saefong, Commodities Corner | MarketWatch


By Myra P. Saefong, MarketWatch 
SAN FRANCISCO (MarketWatch) — U.S. equities outperformed commodities this year by a long shot, but commodities have a good chance to regain investor favor in 2014 after three consecutive years of declines.
“Something has got to give in 2014,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago.

As the investing game draws to an end for the year, the near final score is: commodities down roughly 9%, based on the Dow Jones-UBS Commodity IndexXX:DJUBS -0.38% The Dow Jones-UBS Commodity Index Total Return Exchange-Traded Note DJP +0.05% has lost 10% year to date. The S&P 500 Index SPX -0.01% , on the other hand, has surged 25%, on track for its best year since 2003.

Why Inequality Matters By Paul Krugman: NYT | ALERT FGC BOLSA - FGC FINANCIAL MARKETS December 15, 2013.

The New York Times | MY ALERTS

FGC BOLSA- FGC FIN

Compiled: December 15, 2013 08:37:24 PM

Op-Ed Columnist

Why Inequality Matters
The economic populists have it right.

The Australian Business Briefing December 15, 2013: Discover a place for better directors

The Australian Business
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The Australian Business

Trade With Precision (TWP) December 15, 2013: This Week`s Market Commentary Videos and Webinars.

from Trade With Precision - www.tradewithprecision.com

Watch this week's market commentary videos where Nick McDonald provides a market outlook for the week ahead on the Russell 2000 and US Equity Markets along with the US Dollar Index.

Also remember to register for our last two webinars of 2013 below:
The Top Ingredients For Successful Trading runs on:
Trading Strategy Precision Style runs on:

ZIM Weekly Update December 15, 2013: Get Ready, Tapering May Be Coming Soon.

Get Ready, Tapering May Be Coming Soon

by Mitch Zacks, Senior Portfolio Manager



It is back. Talk of tapering QE3 sooner rather than later is heating up. Until last Friday, most believed the Fed would not begin slowing their purchases of Treasuries and Mortgage-Backed securities until at least March 2014. However, recent positive data on GDP growth and unemployment has investors thinking we may see a pre-Christmas taper at the next Fed meeting this week.

(Continued below...)


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Download Zacks' December 2013 Market Outlook

Download the latest Zacks Investment Management market commentary and learn where we believe the market is headed and why. This must-read report includes timely information regarding the stock market, the housing market, and the overall economy.

Click Here to Download 

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Last week it was reported that the upward revision of GDP due to QE3 came in at a seasonally adjusted annualized rate of 3.6%. The consensus was GDP would come in at 2.7%. The unemployment fell to 7% for the right reasons. The private sector added jobs in November that far exceeded expectations. It is still only one month of data, but certainly things are moving in the right direction. Because of this, the talk of tapering is once again dominating financial headlines.

Another Reason for Tapering

Additionally, it looks like there might be an end to fiscal uncertainty. Fed officials are starting to talk with more confidence about the prospect for economic growth next year. The reason being is they see the effects of fiscal drag from government cutback easing next year and a waning impact from the tax hike last January. In September, the Fed said it was worried about a government shutdown. Now it seems Democrats and Republicans are on the verge of a deal to put off another deficit debate for at least two more years. Taking the fiscal uncertainty risk off the table is a bullish factor for the economy and the stock market.

I am not convinced we will see tapering start in 2013. The Fed has stated the end of QE3 will be data dependent and will not be based on one month of data, but rather a trend that shows the U.S. economy is on solid ground. This type of positive trend may allow the Fed to feel it is appropriate to be slightly less accommodative.

The Market is Ready

I do believe the economy is on solid ground and can withstand tapering and eventually the phasing out of the entire QE program. Whether it happens in December, January or March does not really matter. It is going to happen sooner or later and our economy should continue to grow without it. In fact, there is a very good chance the end of QE will actually help the economy. I have said this before, but it bears repeating. QE has not had the intended effect the Fed thought it would have. They believed that pumping $85 billion of liquidity into the economy every month would be stimulatory. However, it may be having the opposite effect by keeping the long rate artificially low and taking away the incentive for banks to lend out the money that is being pumped into the economy. This cash has essentially been stuck on the balance sheets of corporations.

Banks are holding onto the cash until they get a clearer picture of what the regulatory picture will be. Hopefully, with the Volcker Rule all but done, lending should increase. Banks do not want to be caught being undercapitalized like they were in 2008, so they await the rules before they re-enter the game. They also are waiting for the long rate to rise. Right now, the risk/reward tradeoff of lending is not enough to get them to lend to anyone, but those that have impeccable credit. Many small businesses cannot get loans right now because the profit the banks make is not worth the risk of a small business defaulting on its debt. Banks borrow on the short end and lend on the long end, so the lower the long rate is, the less profit there is for banks.

Still Accommodative

The end of QE would undoubtedly cause the 10-year Treasury rate to rise to wherever the free market dictates it should be. This will be a positive for banks and for the economy as a whole. The more money being lent out, the more money will be in the economy and should help growth accelerate. We have already seen this exact thing occur in the UK. They ended their version of QE in 2012 and since then have seen their economic growth accelerate and lead the Eurozone out of a recession.

The Fed has also indicated it has no intention of raising the short rate anytime soon from the near zero level it is at now. Just because tapering starts and QE eventually ends, the Fed will still be accommodative with the short rate until unemployment comes down to approximately 6.5%.

Putting it All Together

At the end of the day, QE3 will have to end sometime and I feel the issue is being overblown in the media and by many investors. Yes, it is possible it could lead to a pullback in the market, but as soon as market participants see that tapering or ending QE3 is not the end of the world, the buying will start again and the correction will end. I expect economic growth to pick up in 2014 and to see more quarters like the last one. The recovery will be volatile, as all recoveries are. But the economy is in fine shape and the future looks bright for stocks. When the market is up 20% in any given year, the following year tends to be an up year for stocks as well. Do not lose sleep over taper talk, it could be a blessing in disguise.


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Find Out Which Asset Class is Poised to Lead

December Edition


Download the latest Zacks Investment Research market commentary and forecasts of future asset class returns. Learn where we believe the market is headed and why. This must-read report includes timely information regarding the stock market, the housing market, and the overall economy.

Click Here to Download 

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About Mitch Zacks

Mitch is a Senior Portfolio Manager at Zacks Investment Management. He wrote a weekly column for the Chicago Sun-Times and has published two books on quantitative investment strategies. He has a B.A. in Economics from Yale University and an M.B.A. in Analytic Finance from the University of Chicago.


Mitch also is a Portfolio Manager for the Zacks Small Cap Core Fund ( ZSCCX ).

NYT | Today's Headlines December 15, 2013: Top News: Officials Say U.S. May Never Know Extent of Snowden's Leaks

The New York TimesMost Popular | Video |

Today's Headlines

Sunday, December 15, 2013

Top News
Officials Say U.S. May Never Know Extent of Snowden's Leaks

By MARK MAZZETTI and MICHAEL S. SCHMIDT

Investigators remain in the dark partly because the facility where the former National Security Agency contractor Edward J. Snowden worked was not equipped with software to monitor employees.
. Obama to Keep Security Agency and Cyberwarfare Under Same Command
Members of Bulgarian nationalist groups patrolled Sofia, Bulgaria's capital, last month, an example of
Far Right in Eastern Europe Makes Gains as Syrians Arrive

By ANDREW HIGGINS

A party known as Ataka, which means attack, champions "Bulgaria for Bulgarians" and has denounced Syrian refugees as terrorists whom Bulgaria, the European Union's poorest nation, must expel.
The Selling of Attention Deficit Disorder

By ALAN SCHWARZ

Diagnoses have soared as makers of the drugs used to treat attention deficit hyperactivity disorder have found success with a two-decade marketing campaign.
. Video  Video: How Pharmaceuticals Sell A.D.H.D.
For more top news, go to NYTimes.com »
Editors' Picks

ARTS

The Best of 2013
Slaves, astronauts and con artists in film. "Matilda" and "Macbeth" in theater. Slimy politicians and zombies on TV. Kanye West, Lorde and Nine Inch Nails in pop music. Paul McCarthy and medieval treasures in arts. An extended look back at the year's very best.

OPINION | OPINION

A Formula for Happiness

By ARTHUR C. BROOKS

Social scientists have determined three sources of supreme contentment: genes, events and values.

QUOTATION OF THE DAY

"The numbers make it look like an epidemic. Well, it's not. It's preposterous. This is a concoction to justify the giving out of medication at unprecedented and unjustifiable levels."
KEITH CONNERS, a psychologist and professor emeritus at Duke University, criticizing the rise of attention deficit hyperactivity disorder or A.D.H.D. diagnoses and prescriptions for stimulants.

World
State Funeral of Mandela Begins

By JOHN ELIGON, LYDIA POLGREEN and ALAN COWELL

After 10 days of national mourning, Nelson Mandela is to be buried with military honors at a ceremony blending the public and the private.
. Video From NBC News Live
. Video  Video Notebook: Mandela Arrives Home
American and Chinese Navy Ships Nearly Collided in South China Sea

By JANE PERLEZ

The encounter this month was a sign of the increased tensions in the South China Sea as China tries to enforce its territorial claims.
Ciudad Juárez, a Border City Known for Killing, Gets Back to Living

By DAMIEN CAVE

Only a few years ago, Ciudad Juárez was a symbol of drug war devastation. But the killing has subsided, replaced by new businesses, returning residents and cautious hope.
. Photographs  Slide Show: A Violent Border City's Revival
For more world news, go to NYTimes.com/World »
U.S.
A Utah Law Prohibiting Polygamy Is Weakened

By JOHN SCHWARTZ

A federal judge struck down parts of Utah's anti-polygamy law as unconstitutional in a case brought by a star of "Sister Wives," the reality television show.
Sheriff Lee Baca in Los Angeles on Monday after 18 of his officers were indicted in a federal inquiry. He says there is no departmental problem.
Arrests Challenge Los Angeles County Sheriff's 4-Term Tenure

By JENNIFER MEDINA

With the County Sheriff's Department enmeshed in new allegations of civil rights violations and falsified reports, its leader, Lee Baca, faces renewed calls for his resignation.
Scientists Turn Their Gaze Toward Tiny Threats to Great Lakes

By JOHN SCHWARTZ

Scientists have worried about plastic debris in the oceans for decades, but focused on enormous accumulations. More recently, the question of smaller bits has gained attention.
For more U.S. news, go to NYTimes.com/US »
Politics
Enrollment Errors Cut, Officials Say; Fixes Are Overstated, Insurers Report

By ROBERT PEAR

The Obama administration said it had reduced the error rate in enrollment data sent to insurance companies, even as insurers said that files they received were riddled with mistakes.

STRATEGIES

Surprise in a Matchup of Presidential Stock Portfolios

By JEFF SOMMER

Another look at two hypothetical portfolios created last year: one anticipating President Obama's re-election, another a Mitt Romney victory.

FAIR GAME

Wake Up the Banking Police

By GRETCHEN MORGENSON

The Volcker Rule approved by regulators will prove to be of little value if banking regulators fail to enforce its provisions.
For more political news, go to NYTimes.com/Politics »
Business
Mika Otani and more than 12,000 other Japanese competed in a telephone-answering contest, a showcase of cultural etiquette.
Japan's Top Voice: High, Polite and on the Phone

By HIROKO TABUCHI

The annual All-Japan Phone-Answering Competition for office workers is a closely watched contest that some say reiterates the stereotype of women in clerical positions.
. Video  Video: Hello, Japan's Champion Speaking ...

ECONOMIC VIEW

Solving the Shortage in Primary Care Doctors

By CATHERINE RAMPELL

Congress and the hospitals have established a residency system that doesn't train the doctors Americans need most.
Cook Islands, a Paradise of Untouchable Assets

By LESLIE WAYNE

These flyspeck islands in the Pacific have the reputation of being a place where assets can be hidden from business partners, litigants or former spouses.
For more business news, go to NYTimes.com/Business »
Technology
Lee Kun-hee, third from left, chairman of Samsung, who transformed a second-rate maker of household appliances into today's hugely successful conglomerate.
Samsung: Uneasy in the Lead

By ERIC PFANNER and BRIAN X. CHEN

While the Korean industrial group dominates some electronics categories, its chairman, Lee Kun-hee, warns employees against complacency.
. Photographs  Slide Show: A Fast-Follower Now Wants to Be a Tech Trendsetter
. Interactive  Timeline: From Fish Trader to Smartphone Maker
Susan Miller, an astrologer, author and founder of AstrologyZone.com, imposed subscription fees to make ends meet.

BITS BLOG

A Missing Revenue Stream From Mobile Apps

By JENNA WORTHAM

Small niche publishers are seeking a business model that will help them make money from their mobile apps featuring specialized content.
France Broadens Its Surveillance Power

By SCOTT SAYARE

The legislature approved an electronic surveillance law that critics feared would markedly expand electronic surveillance of French residents and businesses.
For more technology news, go to NYTimes.com/Technology »
Sports
Jameis Winston set Football Bowl Subdivision freshman records for touchdown passes, with 38, and passing yards, with 3,820.
Winston Earns Heisman in a Runaway

By GREG BISHOP

Florida State's Jameis Winston, who faced scrutiny this season after being accused of rape, finished 1,501 points ahead of A J McCarron for the seventh-largest victory margin in Heisman history.
A Last Hurrah for Hollywood Park

By JOHN BRANCH

With the track's last race scheduled for Dec. 22, among the few likely to witness its final moments are those who remember the synchronization of the golden eras of horse racing and Hollywood.
Tim Hardaway Jr. of the Knicks scoring on a fast break against the Hawks. Hardaway finished with 13 points in Saturday's win.

KNICKS 111, HAWKS 106

No Rest for Stoudemire; No Regrets for Knicks

By ZACH SCHONBRUN

With limited options, Mike Woodson rolled the dice with his star Amar'e Stoudemire, who is still recovering from knee surgery.
. Interactive Box Score
For more sports news, go to NYTimes.com/Sports »
Arts
 Amy Adams and Christian Bale in
The Festival World, and What's Beyond

By MANOHLA DARGIS

"American Hustle" and "12 Years a Slave" are among a critic's favorite films of the year.
Kevin Spacey in
I Want It Steamy, and I Want It Now

By ALESSANDRA STANLEY

Juicy escapism predominated on television this year, with series like "Scandal," "Revenge" and "House of Cards" eclipsing offerings like 'The Newsroom.'
The New Zealand singer Lorde performing in Los Angeles.
And a Teenager Shall Lead Them

By JON PARELES

Popular acts like Laura Marling, Nine Inch Nails, M.I.A., Janelle Monáe and David Bowie made room for the newcomer Lorde among a list of the best albums of the year.
For more arts news, go to NYTimes.com/Arts »
N.Y./Region
Mayor Michael R. Bloomberg with his girlfriend, Diana L. Taylor, at an Association for a Better New York event. Mr. Bloomberg's consulting group will include many of his best-known deputies.
Bloomberg Focuses on Rest (as in Rest of World)

By MICHAEL BARBARO

Mayor Michael R. Bloomberg will take much of his City Hall team with him as he creates a consulting group to help him reshape cities around the globe.
Despite a number of sensational cases, serious crime is still down in New York City.

BIG CITY

Not in Office, de Blasio Is to Blame

By GINIA BELLAFANTE

It seems that every time a crime or an act of disorder is committed in New York, the new guard of liberals with their appeasing ways is given blame.
. More Big City Columns
Once Around an Island: Walking