Summary: [leadplayer_vid id=”530B439AA2D94″ Daniel Kertcher – Market Update February 2014 Hi, Daniel Kertcher, CEO and Founder of Trading Pursuits and welcome to the monthly market review for February 2014. Now before I get started with this presentation, let me just quickly take you through a couple of disclaimer points, number one, what you are hearing from this presentation is what we call, General Advice, not individual specific advice, further more we have taken consideration your personal financial objectives, trading involves risk, past results means returns does not mean you will get the same in the future. And finally, our company, Trading Pursuits with holds an Australian Financial Services License. Aright, we’ve had a very interesting month, the SP500 after reaching as its all-time high about 1845 points last month, has pulled back at about 6% this current month. Now what’s interesting about that is the biggest five day drop we have seen, in the last 2-3 years, now the market pulled back by about 6% due to the lower than expected ISM Manufacturing data that came out a few weeks ago. Now what does ISM mean? Well, ISM manufacturing data basically is demonstrating the expansion or contraction of factories. Now given the fact we have had just one of the worst coldest winters in US recorded history, there are parts of Canada and United States that were minus 30 Celsius and tons of snow. So you can imagine snow situations that factories are closed, transport is very difficult, heating cost is very high and as a consequence the manufacturing output in distribution is lower than expected. In fact, the expectation was that the figures are going to come in by about 56.5 but in fact they came in way down at 51.3 well below the expected amount. So here you can see the graph of ISM manufacturing, the red line there as you can see is the expectations were for the ISM manufacturing to come in, in fact they came in below that than 51.3 so up on 56.5 could have been one of the highest levels we’ve seen for the last five years. Well in fact we’ve got one of the lowest levels we’ve seen for the last five years. Now is this really a bad thing? Not really because again given the fact that we had a terrible winter which now is basically over or coming to an end in America plus the fact if you look back over the last fourteen years back in year 2000 you can see how the current value of ISM at 51.3 means that companies and factories are in fact fill in an expansion phase. And it is nowhere near the lows that we’ve seen in previous years, so yes it is lower than expected and it took the market by a bit of surprise but over all this is not a turning point in the market, we are not entering into a crashing stock market period. On the positive side, US unemployment has continued to fall; unemployment in America is now below 7% about 6.97%, and the lowest level we’ve seen in the last five years. So despite the fact that we have this low ISM data, the reality is the market appreciated and understood the fact that it is due to the terrible winter and so in the last 5-6 days the market has completely rebounded back-up again and in fact the SMP500 is back trading near 1845 points, near it’s all time record high. So it is quite a volume amount but it has rebounded back up. One of the reasons why market has rebounded so strongly, it has been an incredibly strong earnings that have been coming in American companies. Here we are looking at the earnings result, for the SMP500, top 500 companies in America, and we can see that by looking at top 500 or in this case 421 out of the top 500 companies have made their earnings or profit and loss of statement announcement, we can see that on average 1.06% of all companies have reported they have all performed their sales expectations their revenue, on over 1% better than what analysts expected, that is pretty fantastic. More importantly though the earnings you can see overall, they’ve beate[...]
