Monthly Archives: July 2009

The Residential Real Estate / Commercial Real Estate See-Saw

According to a July 27, 2009 Economic Report posted on MarketWatch, June's new home sales rose by a stronger than expected 11% to a seasonally adjusted annual rate of 384,000. This represented the largest amount since November 2008. Furthermore, inventories of unsold homes fell 4.1% in the month June. The adage that real estate is all about location, location, location seems to still be relevant during this particular housing market recovery period. For example, the report also showed that sales rose over 29% in the Northeast, increased over 43% in the Midwest and climbed over 22% in the West while falling over 5% in the South. The overall improvement in sales is an encouraging sign that the housing market may finally be stabilizing.Read more

Understanding Inverse ETFs

Inverse exchange-traded funds ("ETFs") and exchange-traded notes ("ETNs"), both flat and leveraged, have been the subject of a lot of debate these days. I believe that a lot of the confusion and concern stems from a basic need for the industry as a whole to do a better job of educating the investing public about the rapidly evolving market of exchange-traded products. For example, the inverse products themselves may or may not be appropriate for long term investors because of their daily valuation mechanism. Inverse products essentially reset every day which is why buy-and-hold type investors are dismayed that the returns of the inverse ETFs and ETNs often vary significantly from what would be expected given the performance of the underlying index.Read more

Hennion & Walsh CIO, Kevin Mahn, quoted in the New York Times

Hennion & Walsh CIO, Kevin Mahn, quoted in the New York Times.Read more

ALERT: The S&P 500 is Now More than 5% Higher than its Trailing

As an update to our June 4, 2009 post entitled, "The S&P 500 Just Crossed its 200-Day Moving Average - So What", I am pleased to report that the S&P 500 Index, with its closing level of 932.68 on July 15, 2009, has now crossed through our suggested momentum turning technical level of > + 5% of the 200-Day Moving Average. This represents the first change to this technical signal since November 26, 2007.Read more

What will/should the Federal Reserve Do Next?

The Federal Reserve currently finds itself in a difficult balancing act. On the one hand, it is trying to be an active participant in thawing the frozen credit markets and stimulating a U.S. economy that has been in recession since December of 2007 (according to the National Bureau of Economic Research - "NBER"). On the other hand, it recognizes the growing threat of inflation and the damage that inflation could have on an economy that is likely to start finding its legs again later in the year. In recognizing this threat, it realizes that some its own actions with respect to quantitative easing have added to mounting inflation concerns and many, including members of my research team here at Hennion & Walsh, are interested in the details of the Fed's exit strategy in this regard.Read more