The Weekly Snapshot-December 13, 2015

In the top news headlines:

Kinder Morgan, Freeport McMoran, Anglo-American cut dividends

Climate deal reached in Paris. Not legally enforceable, all voluntary, no one cares.

Dow, Dupont agree to merge, divest and keep Wall Street employed.

Junk bond fund halts redemptions.

Economic News

China loosens Yuan peg to the dollar.

Oil hits new lows.

Jobless claims hit 5 month high.

Retail sales disappoint again; auto sales down second straight month.

Fed expected to hike rates this week.

Random Thought Of The Week

In recent weeks I’ve heard that we are in an “earnings recession” and a “manufacturing recession”. The oil patch is in recession and mining companies are, I guess, in a dividend recession since they all seem to be cutting them, in some cases all the way to zero. And yet no one has proclaimed that the overall economy is in recession. One wonders how many “recessions” we have to have before the qualifiers are removed.

Chart Of The Week

If it walks like a duck and it quacks like a duck, well you might have a duck on your hands. Manufacturing is not the tiny piece of the economy the talking heads would have you believe and it isn’t doing well.

Broad Market – 3-month Returns

REITs and the S&P 500 are back at the top of the 3 month rankings but that’s just because stocks are back near their highs. A longer term look shows that stocks have made no progress over the last year. Long term Treasury ETFs have moved back into the top 5 as stocks have sold off over the last week.

MOMENTUM ASSET ALLOCATION MODEL

SPDR Sector Returns – 3 Month Returns

Consumer staples moved back near the top as the market gets more defensive. Interesting that technology has gotten a lot of attention as a leading sector but REITS have actually performed better over the last 3 months. Technology outperformed REITS by a wide margin – until the late August selloff.